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Osun, Delta fine Google, Meta For Tax Evasion

POSTED ON July 26, 2024 •   Metro      BY Benedicta Bassey
Google and Meta logo type

Following the alleged non-remittance of a withholding tax, the tax authorities in Osun and Delta states have fined Google Nigeria and Meta Platforms, Inc, $150 mllion and $200 million respectively.

The authorities explained that the fine covered specifically the Withholding Tax allegedly deducted from content creators and entertainers in the two states from 2020 till date.

This information was contained in separate letters signed by Messrs Sola Adewunmi, and Solomon Ighrakpata, Executive Chairmen, Osun and Delta States Internal Revenue Service (IRS) respectively.

The letters, also signed by Ademola Odetunde, Chief Operating Officer, LafriquePromedia Ltd., the revenue collection agent for the states, were made available to the News Agency of Nigeria in Lagos.

Odetunde said the companies were issued a 14-day notice of compliance, effective July 12 and July 19 respectively, from the affected states.

He said that the companies, upon the receipt of those letters, would face the consequences for non-compliance.

Odetunde said that the states were demanding for the payment of $50 million and $200 million respectively, being assessed withholding tax deducted, but not remitted by the companies, at the rate of five per cent to the states.

Odetunde said: ”By this demands and notices for compliance, we hereby advise your companies to comply with our demands through our revenue agent within the next 14 days.

"We want to bring your attention to the fact that the concept of WHT is a form of advance payment of income tax, which is deductable at source on payment made for certain commercial transactions by Nigerian customers.

"Same must be remitted to the appropriate tax authorities – Federal, by corporate bodies, or State Internal Revenue Service, by individual, enterprises and partnership within 21 days after the end of the month the transaction was made."

According to him, the companies, as an operator of Social Media Platform within the Osun and Delta states’ digital landscape, are mandated to withhold tax in line with the provisions of the extant law.

Odetunde said the law required non-resident companies providing digital services in Nigeria to withhold tax.

He said that also meant that the companies were required by law to collect and remit WHT on digital services provided to customers within the Osun and Delta states’ digital landscape.

Withholding tax is mostly used for collecting tax on non-residents’ income in Nigeria where cross border enforcement is impracticable.

Odetunde said: ”We observed that over the years your companies willfully refused, failed and neglected to remit the withheld tax to the local tax authority for Osun and Delta states, Nigeria.

"Take further notice that, when a non-resident company deducts WHT from payment for digital services provided to customers within Osun and Delta states digital landscape.

”Without remitting the same to the local tax authorities, which is Osun and Delta States Internal Revenue Services, a criminal offence has been committed by such non-resident company.

”The law permits us to prosecute the offending non-resident companies and take necessary steps to recover the WHT."

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