The tax authorities in Osun and Delta States have issued fines to Google Nigeria and Meta Platforms, Inc. for alleged non-remittance of Withholding Tax (WHT). Google Nigeria has been fined $150 million, while Meta has been fined $200 million. These fines are related to WHT deducted from content creators and entertainers in the states from 2020 onwards.
The fines are based on claims that these companies did not remit WHT at the rate of 5% to the relevant state tax authorities. The companies have been given a 14-day notice to comply with the payment demands, effective from July 12 and July 19, respectively.
Withholding tax is a mechanism for collecting tax on non-residents’ income in Nigeria, especially where cross-border enforcement is challenging. This tax is meant to be deducted at source from payments for commercial transactions and then remitted to the appropriate tax authorities. The states argue that the companies failed to comply with this requirement, constituting a criminal offense under local tax laws.
The states have warned of possible legal action if the companies fail to meet the payment demands, including potential penalties and interest charges for non-compliance.
