Section 5 1 a supra . Another major enforcement issue is identifying the state, country or countries that have tax jurisdiction over income generated by electronic transactions. Is it purely a trans-border issue, or are there domestic complications too?
Here too, in many instances, existing tax collection mechanisms can work — especially when the transaction involves goods, or is a domestic one.
Today, a significant number of transactions in Nigeria sale and purchase of goods and services are consummated using mobile devices and online payment platforms.
In tandem with development, oftentimes comes challenges and this emerging market is no exception. Tax Authorities have been challenged with the emergence of e-commerce, owing to the fact that Tax laws were initially designed to consider only physical transactions.
In spite of the arguments in favor of the global nature of e-commerce, it would be foolhardy to ignore the threat posed by this form of trade to unstructured tax regimes. Section 6 supra . In the case of deductions on received income, there arises a challenge where both parties are in varying jurisdictions as the paying party who may be in another country is plagued with the problem of remitting the sum to the relevant tax authority.
The tax payer is not immune to challenges as they often suffer the fate of double taxation and the incomplete provisions of VAT Act has not helped. There are likely many adverse unintended and unanticipated consequences lurking in the future.
In this instant and bearing in mind the fundamentals of VAT, it can be safely assumed that VAT is payable at the location of supply. What they may lose sight of, however, is that inappropriate government intrusion in the form of regulation and taxation may in fact chill the development and marketing of new products and services.
The only logical resolve would be a liaison between the e-payment systems, banks, the authority themselves and the annual returns filed by the taxable person.
Global industrialization and efficiency in the factors of production and distribution of goods and service has significantly altered the primordial perception of a market from being a designated location for exchange of goods and services to boundless geography underpinned by daily human interactions in search for ways to meet their basic needs.
Whilst it is tempting to assume the time is not ripe enough to mobilise resources to confront tax leakages from the digital economy probably because there is evidence that FIRS is yet to maximize tax revenue from the registered taxpayers in the non-digital business frontthe more reasonable course is to seek to deal with the tax leakages from the digital business simultaneously.
And, of course, we are looking for additional input from participants at the Dubai conference. Thereby engaging in tax collection and remittance. I believe it was Will Rogers who once observed: Following this, it is also logical to conclude that the fact that an order is made via the internet does not obliterate the incidence of VAT where there is a delivery of the goods.
Recall that the browser programs, such as Netscape, which make the Internet so consumer-friendly did not arrive on the scene until Those advocating taxation of the electronic marketplace are also operating on the basis of expectations: Even our direct taxes have not helped as taxation is premised on permanent establishment.
While the Advisory Commission on Electronic Commerce seems more focused on how to tax the Internet, only Congress can authorize one state to compel sellers in another state to collect Internet taxes.INTERNATIONAL E-COMMERCE IN AFRICA: THE WAY FORWARD vi ECE Acknowledgements ITC would like to acknowledge the support of its parent organizations, UNCTAD and WTO, in their efforts to disseminate understanding and advance the agenda for improving access to e-commerce, in developing countries and beyond.
The e-commerce story in Nigeria started during the early part of the 21st century and its development has steadily been on the rise.
This has been re-echoed by the Central Bank of Nigeria's recent implementation of the cashless policy with one of its aims being to encourage more electronic-based transactions (payments for goods, services, transfers, etc.). Currently, e-commerce transactions in Nigeria largely escape taxation even though their live transaction counterparts are almost always subject to some form of state or federal tax.
This has touched off a lively debate about how to extend tax liability to e-commerce in ways that are in parity with offline taxes; whether sales taxes should be restructured or replaced; and even whether e-commerce should be tax. This research seeks to address the challenges e-commerce poses to Value Added Tax (VAT) in Nigeria, with a domestic focus on tracking e-commerce transactions for VAT purposes and the challenges of cross-border trade on e-commerce VAT.
E-commerce is an industry patronized by different classes of business because of its wide coverage and the latent revenue inherent in it. Apart from the ever growing size of its revenue, it can also be considered an income injection into the economy.
Taxation of e-commerce is however still a grey area in Nigeria. E-Commerce and Sales Tax Words | 6 Pages. E-Commerce and Sales Tax 5/2/ Throughout the country, states are not collecting some or any taxes on online transactions.Download