A Cyber security expert, Mr. Remi Afon, has faulted the move by the Federal Inland Revenue Services (FIRS) to charge Nigerians, who make online payments via bank cards 5percent Value Added Tax.
An online newspaper, had quoted the Chairman of the Federal Inland Revenue Services (FIRS), Mr. Tunde Fowler to have said that from early next year, it will appoint banks as agent to deduct 5 percent VAT from everyone who gives instructions for service for purchase online.
“We are thinking that maybe early next year, we will advise banks to start deducting five percent VAT for all online purchases done locally,” the newspaper quoted him.
Though, he admitted that Nigeria is not fully ready for the growing digital economy, the move, he said, will be based on existing laws in Nigeria.
But in a series of tweet, Remi Afon, who is also the President of the Cyber Security Experts Association of Nigeria (CSEAN), noted that 5 percent tax for online purchases is another unfriendly policy that will make Nigeria a difficult place to do business.
“5 percent tax for online purchases will undoubtedly discourage online transactions and have a negative impact on Information Technology, startups, Fintech and online businesses,” he tweeted via @RemiAfon.
He added that Nigeria is already dealing with corruption, restrictive and exploitative investment policies and high level of insecurity in the country, urging lovers of the country to resist 5 percent online tax to avoid a massive banking activity decline in the country.
Tweeting further, he warned that bank customers would henceforth prefer to open an account in other African countries to obtain their debit card. Thanks to the new Africa Continental Free Trade Agreement and existence New Banks that allows customers to open an account online without physical presence
“Why make life more difficult when Nigeria’s Ease of Doing Business Index Rating is 146 according to a 2019 report released by World Bank Group, compared to Kenya’s 61 and South Africa’s 82. Both countries are classified as ‘Easy’ for doing business,” he questioned.
Though, online purchases and payment can be said to be relatively new in Nigeria, it is increasing becoming very popular among Nigerians, who purchase items from online stores such as Jumia and Konga and pay via their bank debit and credit cards.