Nigeria 5% withholding VAT on e-commerce 2020
- Aug 7, 2019 | Richard Asquith
Nigeria is considering becoming the latest country to introduce a withholding VAT regime on e-commerce. This would require payment providers, credit cards and other electronic payment schemes to hold back 5% VAT on any transaction between a Nigerian consumer and an online seller. This VAT would then be forwarded directly to the tax authorities.
With increased levels of online sales in one of Africa’s largest economies, the Federal Inland Revenue Service measure would be particularly effective forwith local players Jumia and Konga. But also for foreign platforms such as China’s AliExpress where levels of compliance by foreign sellers may be more challenging.
Early 2020 is the likely implementation date. Argentina is already operating a similar scheme, with other countries expected to follow as they look to improve VAT collections on cross-border e-commerce.