The Internal Revenue Services of Osun and Delta states have imposed a hefty fine of $350 million on Google Nigeria and Meta Platforms Inc. The two tech giants stand accused of failing to remit withholding tax (WHT) from content creators and entertainers from 2020 to the present.
The fines, detailed in letters from Sola Adewunmi and Solomon Ighrakpata, Executive Chairmen of the Osun and Delta States Internal Revenue Services respectively, were signed by Ademola Odetunde, Chief Operating Officer of LafriquePromedia Ltd, the states’ revenue collection agent. This development was reported by the News Agency of Nigeria (NAN).
Google Nigeria has been fined $150 million, while Meta Platforms Inc. faces a $200 million penalty. According to Odetunde, both companies were issued a 14-day compliance notice on July 12 and July 19, respectively.
The notice warned of severe consequences for non-compliance, emphasizing the critical importance of remitting WHT, a form of advance income tax, to the relevant state tax authorities within 21 days of the transaction month.
“The failure to remit these taxes has significant implications for the state’s revenue and the equitable distribution of resources,” Odetunde stated. “Non-compliance penalties include a fine of 10% of the amount not remitted, plus interest at 21%, and potential imprisonment for corporate officers.”
The tax authorities assert that the companies have neglected their tax remittance duties over the years, despite ongoing communications since October 13, 2023. This persistent neglect has prompted the states to take decisive action.
“The revenue agent has been in communication with the companies since October 13, 2023, without success,” Odetunde added, underlining the prolonged nature of the issue.
The fines are part of a broader effort by Nigerian state authorities to ensure compliance with tax regulations and bolster state revenues. Withholding tax serves as an advance payment of income tax, which is crucial for funding public services and infrastructure projects.
In response to the fines, both Google Nigeria and Meta Platforms Inc. are expected to engage in discussions with the state tax authorities to resolve the matter. Failure to comply could result in further legal and financial repercussions, including the potential imprisonment of corporate officers responsible for tax compliance.
This development underscores the increasing scrutiny on multinational corporations operating in Nigeria and their adherence to local tax laws. As governments worldwide tighten regulations on digital economy taxation, the actions of Osun and Delta states reflect a growing trend towards holding tech giants accountable for their tax obligations.
