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Business News of Tuesday, 17 May 2022

Source: www.thisdaylive.com

Nigeria needs friendly tax laws in a digital economy

Although, Nigeria has its own tax law, it is important that this law is friendly, fair and flexible, so that the nation can tap from the fast developing digital economy.

These were the views of Dr Alexander Ezenagu, the Guest Speaker at the 2022 edition of the Punuka Annual Lecture, with the theme: “Taxation of the Digital Economy: The Challenges and Prospect for Nigerian Economy”.

The University Don said that, given the present international convention where digital business and economy is fast developing, a good tax law that will allow you to tax businesses, both with physical presence or without any physical presence, is what Nigeria needs now given the speed at which Nigerian’s digital economy is developing.

He further maintained that, Nigeria needs to elevate its digital tax laws to the royalty level.

Also speaking at the event, the Nigeria’s Minister of State for Budget and National Planning, Prince Clem Ikanade Agba, said digital economy is high on the list of untapped sources of funds for the Nigerian tax authorities, and it is the future of the nation.

Agba, who also towed the line of the Guest Speaker, said that a delicate balance must be achieved, such that taxation of the digital economy did not stifle its growth, noting that taxes were the lifeblood of Government.

According to him: “It is the blood with which the economy runs and functions, and without it, a government will not be able to fulfil its obligations to the citizenry.

“Whatever affects collectible taxes will therefore, affect the health, existence and performance of the Government and the economy.”

He explained that the digitalisation of the economy had revealed some challenges and shortcomings in the existing tax practice, as it affects the allocation of taxing rights and administration of taxes, especially with respect to non-resident taxpayers.

In her welcoming address, the Managing Partner of Punuka Attorneys & Solicitors, Mrs Elizabeth Idigbe said “that the advent of the internet, birthed prime opportunities for globalisation. The digital space in Nigeria, has witnessed immense growth over the years. In January 2022, Kepios Data Analysis reports that internet users in Nigeria rose by 4.5million”.

She further added: “that globalisation has brought about digital trade, commerce and taxation. It has also resulted in major digital advancement, with the emerging issues on crypto currency-commerce and cross border digital trade”.

“It has become imperative to examine incidental issues on taxing the digital economy as it presents the Nigerian Government with huge potentials, and at the same time, tax policy may be disincentives for the growth of digital business. This informs the theme of the annual lecture for this year”, Mrs. Idigbe said.

This year’s hybrid lecture is the 14th in the series, and it was attended by a worldwide audience.