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Tax Digital Businesses: FIRS seeks collaboration among African countries

The Federal Inland Revenue Service (FIRS) has said there is need for improved collaboration among Africa countries and international stakeholders on digital businesses to tax. Executive Chairman of the FIRS, Muhammad Nami, made the suggestion recently at a Technical Assistance Programme organised by African Tax Administrators’ Forum (ATAF) with the theme: “Member’s Needs and How To Broaden the Collaboration,” held in Lomé, Togo.

Nami, in his presentation, noted that although some African countries had endorsed the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework’s global solution on the tax challenges of the digitalized economy, Nigeria continues to maintain its position that the outcome will not be favourable to African countries. A statement issued by Johannes Oluwatobi Wojuola, Media Assistant to FIRS chairman, quoted him as saying: “Nigeria continues to hold the view that the outcome will produce very minimal revenue comfort for African counties. This is instructive considering the implementation challenges that developing jurisdictions will face due to the complexity of the Pilar 1 and 2 rules. “Our analysis continues to show that the possible cost of administering and implementing the complex rules will far outweigh the expected revenue accruing from its implementation.

“I therefore urge the African Tax Administrators Forum to join the discussion at the UN Tax Committee of Experts, South Centre, as well as collaborate with all other well-meaning stakeholders to explore alternative rules that will enable African countries to effectively subject the digital businesses and base eroding payments to tax in our jurisdictions. “These collaborations should extend to other rules developed and implemented at the international level for the taxation of Multinational Enterprises such as the tax treaty, exchange of information and transfer pricing rules,” Nami stated. He further called for the African Tax Administrators Forum to collaborate with the United Nations Development Programme (UNDP) to explore opportunities for Africa within the programme’s Tax for Sustainable Development Goals Initiative, to ensure that African countries are able to generate appreciable revenue to fund the Sustainable Development Goals.

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