Google joins Facebook to collect VAT for Abuja from 1 April
By Jeph Ajobaju, Chief Copy Editor
Google is charging at the behest of Abuja 7.5 per cent Value Added Tax (VAT) on adverts placed from Nigeria from 1 April, emulating Facebook which began the collection on 1 January, to replenish a federal treasury stolen dry by kleptomaniacs.
Google disclosed in an email sent to its Nigerian users that VAT charged on purchases will appear as a separate line in the user’s account.
“Due to new legislation in Nigeria, starting April 1, 2022, Google will be required to charge 7.5 per cent VAT on all taxable goods and services. No action is required on your side with regard to your Google business account,” the email explained.
Google showed some changes to the business account that would affect purchases and invoices.
“The amount of VAT charged on your purchases will appear as a separate line in your account. Your invoice or statement will show the amount of VAT charge.”
VAT is a levy on goods and services to the final consumers of goods and services.
Nigerians began paying 7.5 per cent VAT on Facebook and Instagram adverts on 1 January, three weeks after the social media platform announced last December that new regulation by Abuja compels the tax on all personal or business advertisements.
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VAT in other countries
Below are some other countries where VAT is charged on online business, compiled by Nairametrics.
United Kingdom
UK law says: “If you are a business making supplies of digital services to UK consumers, those supplies are liable to UK VAT. If you make supplies of digital services to consumers outside the UK these are not liable to UK VAT.”
Indonesia
Indonesia charges 10 per cent VAT on online businesses – including websites, internet service providers (ISPs), online adverts, and affiliate marketing.
No matter where a business is based, it must pay the tax if it has customers in Indonesia.
Egypt
Online advertisements are subject to 14 per cent VAT, which applies to enterprises with annual sales of more than EGP 500,000.