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| FIRS targets skit makers, influencers, and digital content creators for tax compliance |
The Federal Inland Revenue Service (FIRS) has set its sights on a new generation of earners: skit makers, influencers, and digital content creators.
In a recent announcement, the agency declared its intention to ensure this growing category of individuals fulfills their tax obligations.The Federal Inland Revenue Service (FIRS) has announced its intention to ensure that skit makers, influencers, and digital content creators in Nigeria fulfill their tax obligations. According to a press statement issued by the Special Adviser on Media to the Chairman of the FIRS, Dare Adekambi, the Revenue Service will first set up a meeting and discuss with the entertainers why they should voluntarily pay their tax, but if the appeal fails, they will move to use enforcement.
This move comes amidst concerns about a potential tax gap created by the informal nature of the digital content creation industry. Many creators operate as sole proprietors or through loosely structured businesses, making it challenging to track their income and enforce tax compliance.
"Skit makers, influencers, and other content creators who are making money using digital platforms need to be paying tax," declared Dare Adekambi, Special Adviser on Media to the FIRS Chairman.
"There is a law in Nigeria that requires everybody who earns income to pay tax. They earn in dollars. Tax is a civic obligation; civil servants are paying, so they also have to pay."
Adekambi stated that skit makers, influencers, and other content creators who are making money using digital platforms need to pay tax, as there is a law in Nigeria that requires everybody who earns income to pay tax. He added that many of them earn in dollars, which makes them liable to tax. He also said that the FIRS is working with the Corporate Affairs Commission (CAC) to track them and bring them into the tax net.
He stressed that the FIRS would meet with content creators and influencers and make them see why they should voluntarily pay tax but "if our friendly approach is taken for granted, then we will go for enforcement," he added. He argued that social media content creators and influencers pay taxes in developed countries, and the social media companies also pay taxes, so those who use the platform to make money should also pay taxes to the government.
He said that by the time a committee is set up to look into it, a broad spectrum of activities will be covered. He urged the skit makers, influencers, and digital content creators to cooperate with the FIRS and comply with the tax laws of the country.
The FIRS plans to take a two-pronged approach: education and enforcement.
Initially, the agency will engage with content creators through workshops and seminars to clarify tax regulations and encourage voluntary compliance.
However, if voluntary compliance falls short, the FIRS will resort to enforcement measures, including data mining and collaboration with platforms like YouTube and Instagram to track income streams.
This announcement has sparked mixed reactions within the content creator community. Some creators welcome the move, acknowledging their responsibility to contribute to the national tax base. Others express concerns about the complexity of navigating the tax system and the potential for unfair targeting.
Key questions remain:
How will the FIRS define taxable income for creators with diverse revenue streams, such as advertising, sponsorships, and merchandise sales?
What measures will be taken to ensure fair and transparent enforcement, avoiding undue burden on smaller creators?
Will the FIRS provide adequate support and resources to educate creators about their tax obligations?
The coming months will be crucial in determining the effectiveness and impact of the FIRS' initiative. As the digital content creation industry continues to flourish in Nigeria, ensuring fair and efficient tax collection will be essential for generating public revenue and fostering sustainable growth within the sector.
The announcement by the FIRS has generated mixed reactions from the public, especially from the affected entertainers. Some of them have expressed their willingness to pay tax, while others have questioned the rationale and legality of the move. Some have also raised concerns about the transparency and accountability of the tax system, and how the revenue generated will be used for the benefit of the people.
The FIRS is the agency responsible for assessing, collecting, and accounting for tax and other revenues accruing to the Federal Government of Nigeria. It is also mandated to enforce tax compliance and provide tax education and information to the public.
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