While the Federal Inland Revenue Services (FIRS) is set to impose 5 percent Value Added Tax on Nigerians, who make online payments via bank cards, the Egyptian government is about to finalize a new draft law on income tax, including the application of tax on social media ads and digital platforms.
Reactions have trail both country’s move, with some stakeholders describing it as an attempt to stifle the relatively burgeoning eCommerce and online payment space in Africa.
Read also: Expert faults FIRS’s 5% tax for online purchases
While the move in Nigeria can be seen as a political statement…“We are thinking that maybe early next year, we will advise banks to start deducting five percent VAT for all online purchases done locally,” said Mr. Tunde Fowler, Chairman of the Federal Inland Revenue Services (FIRS).
The Egyptian government is already formulating the policy and having series of meeting with social media giant, Facebook. In a statement by the country’s Ministry of Finance, Mohamed Ma, the government is about to finalize a new draft law on income tax, including the application of tax on social media ads and digital platforms.
The statement disclosed that a specialized team from the Ministry of Finance and the Tax Authority is working on the draft law in coordination and cooperation with Facebook to benefit from their international experience in the field of tax applications on social media sites for advertising and services provided via the internet.
Egypt Today report that the Ministry of Finance is scheduled to coordinate with the relevant stakeholders, including Facebook, as soon as the initial drafting to receive their proposals are approved. The media platform also report that the draft law will be presented to the public and civil societies for scrutiny. This will allow the government to receive suggestions and opinions on the law in light of the ministry’s belief in community participation.