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The tax authorities in Osun and Delta states have fined Google Nigeria and Meta Platforms, Inc. $150 million and $200 million respectively for alleged non-remittance of Withholding Tax. The fines pertain to the Withholding Tax allegedly deducted from content creators and entertainers in the two states from 2020 till date.
This action was disclosed in separate letters signed by Sola Adewunmi and Solomon Ighrakpata, Executive Chairmen of Osun and Delta States Internal Revenue Service (IRS), respectively. The letters were also signed by Ademola Odetunde, Chief Operating Officer of LafriquePromedia Ltd., the revenue collection agent for the states.
Odetunde, who also serves as a legal practitioner, explained that LafriquePromedia is consulting for the IRS of Plateau, which is facing similar challenges and is expected to issue similar demands. The companies have been given a 14-day notice of compliance, effective from July 12 and July 19, respectively.
Odetunde stated, “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 deductible 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.”
He emphasized that the law requires non-resident companies providing digital services in Nigeria to withhold tax and remit it to the relevant tax authorities. The failure of Google and Meta to comply with these requirements over the years has led to the current fines.
The penalties for non-compliance include a fine of 10 percent of the amount not deducted or deducted but not remitted, along with interest at the prevailing commercial rate, currently 21 percent. Additionally, officers of non-compliant corporate taxpayers may face imprisonment or fines if found guilty of tax crimes.
The demand notices aim to ensure compliance without further delay, with the revenue agent having been in communication with the companies since October 13, 2023, regarding the matter.
