Nigeria has entered into agreements with more than 100 countries to gather data on remote workers. This move aims to enforce tax remittance obligations. The initiative is part of a broader push to track and tax citizens earning income online and holding assets abroad.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, revealed the details during a Wednesday webinar focused on “Simplifying Nigeria’s Tax System.”
Enforcing Self-Declaration for Online Income
Oyedele addressed concerns about taxation in the digital economy, especially for remote and online income earners. He emphasized that every remote worker in Nigeria has a primary obligation to declare their income voluntarily, regardless of the source or location of their employer.
“The requirement under this new law is that everybody… has to declare your income yourself,” the tax chairman stated. He warned that if a worker fails to comply, the government will rely on intelligence gathering. This intelligence is triggered when money hits the recipient’s bank account.
Global Data Exchange: Tracking Assets Abroad
The tax chief disclosed that authorities already have records of every transaction flowing into the country. Crucially, Nigeria has signed agreements with over 100 nations under the Common Reporting Standards.
“If you put the money abroad, Nigeria has signed an agreement with over 100 countries,” Oyedele revealed. “They are already sending us data about Nigerians who have money abroad, property abroad, whether it’s Dubai to the US to Canada to the UK. We have all that information already.”
Oyedele advised Nigerians to “do the right thing.” Otherwise, he cautioned, the government will initiate action. “If you fail to do it, the government will then come back to you and say, ‘We know this about you, you haven’t been honest, here’s your presumptive assessment.’”
Successful Taxation of Digital Giants
The country began engaging with major technology companies several years ago. The goal was to address the disparity in Value Added Tax (VAT) between traditional businesses and online platforms.
Oyedele pointed out the unfair advantage: “If you are doing your business, brick and mortar, pop and mom shop, and you sell a phone and you charge VAT, why should the person that is selling it online not charge VAT?” He noted that the government approached the tech giants, arguing that their services were liable to VAT.
Instead of adopting a confrontational stance, the government chose a collaborative approach. This resulted in successful agreements with the tech firms. Oyedele concluded: “Today I can tell you Nigeria is making billions of dollars from those taxes, from those digital giants without fighting.”
Do you think it is right to tax Nigerians who are working remotely and earning their pay?
