Google, Facebook, Netflix Pay N3.8tn in Taxes to Federal Government

Foreign companies operating in Nigeria, including Google, Netflix, Facebook, and others, contributed a total of N3.85 trillion in taxes to the Federal Government in the first nine months of 2024. This marks a significant 68.12% increase from the N2.29 trillion collected during the same period in 2023, according to the latest report from the National Bureau of Statistics (NBS).

The tax contributions include both Company Income Tax (CIT) and Value Added Tax (VAT). The data reveals a steady rise in tax collection, with Q3 contributions reaching N1.30 trillion, up from N1.03 trillion in Q1, and a mid-year total of N1.52 trillion in Q2.

A deeper analysis of the figures highlights a remarkable surge in tax revenue, with CIT alone accounting for N2.57 trillion—an increase of 43.65% from N1.79 trillion in 2023. VAT collections also saw an impressive rise of 157.03%, totaling N1.28 trillion compared to N498.34 billion in the previous year.

CIT, which is taxed at 30% on company profits, and VAT, set at 7.5% on goods and services, are major sources of revenue for the Federal Inland Revenue Service (FIRS). On a quarterly basis, CIT grew by 42.49%, from N598.13 billion in Q1 to N1.12 trillion in Q2, before slightly dipping to N852.29 billion in Q3. VAT collections for the same periods were N435.73 billion, N395.74 billion, and N448.85 billion, respectively.

Since 2020, the Federal Government has intensified efforts to collect taxes from foreign digital service providers that earn revenue in Nigeria. Companies like Netflix, Facebook, and Twitter—operating without physical offices in the country—are now required to contribute taxes on digital services, including video streaming, social media platforms, and digital content downloads.

Similarly, global e-commerce giants such as Amazon and Alibaba generate significant revenue in Nigeria through the provision of goods, services, and data processing. While the FIRS has seen compliance from companies like Google, Meta, and LinkedIn, platforms like TikTok and X (formerly Twitter) are still to meet tax filing requirements.

Earlier this year, Nigeria’s former Accountant-General, Oluwatoyin Madein, noted that tax revenue is now the largest source of income for the nation, surpassing other forms of government revenue. She added that the growth in tax performance provides much-needed financial support for Nigeria’s three tiers of government.

The Federal Government set a target of N19.4 trillion for tax revenue in 2024, with expectations to exceed N18.5 trillion in actual remittances, underscoring the vital role taxes now play in Nigeria’s fiscal health.