Nigeria split payment VAT e-commerce

The Nigerian Federal Inland Revenue Service has revealed plans to levy VAT on e-commerce transactions via bank payment split payments. The policy change comes as an ongoing tax amnesty has failed to deliver the tax revenues expected.

Split payments is a growing popular mechanism to clampdown on VAT fraud. It requires banks, credit card companies and other payment providers to withhold the VAT element on any transaction between a consumer and e-commerce merchant. The provider then remits the VAT directly to the government. It is already in place in Argentina, and attempts to introduce a blocked VAT account version in Poland is to be launched in September 2019