So here’s the news that floated through the airwaves,
Bad news for online purchases
But I bet he doesn’t yet appreciate the enormity of this new policy thrust. It is not only goods that are purchased, but also services as well..
Now there have been rumours (for a while) of something along these lines being planned by government, only that it has only just been confirmed.
The report talks about this new tariff being treated as VAT which is odd since we already pay VAT on numerous goods and services.
Nigeria is planning to deduct 5% VAT for every online transaction via bank cards from next year.
This is very sad, the online ecosystem is still at the rudimentary \ early stage. Nigerian businesses in the online space are already in trouble. The online space is not really as lucrative as people think. Konga, Jumia etc are struggling, with Konga even yet to break even.
By the way, what constitutes an online purchase?
Subscribing to your DStv is an online purchase of a service, for instance, is it not?
How do we distinguish an online purchase from any other online transaction like paying school fees, are we seeing that all online transactions will be taxed at 5%?
Discouraging online transactions when we are supposed to be going cashless?
I don’t get this!
it is of course to be expected that with increasing irrelevance of oil and with oil being our main source of national revenue, taxes as forms of revenue generation are likely to receive more significant focus.
But electronic transactions should actually be encouraged more because it engenders efficiency and saves a lot of costs. Penalizing electronic usage will simply encourage a regression to more use of cash as a form of commerical transactions.
Let’s wait and see how the thing goes next year when it is implemented.