The Federal Inland Revenue Service (FIRS) on Monday, issued a clarification regarding the taxation of online content creators, stating that individual creators, including skit makers, do not fall under their jurisdiction.
This comes after previous reports suggested the agency planned to target content creators as potential tax evaders.
According to an anonymous FIRS source, the agency primarily focuses on corporate entities for Company Income Tax, with the threshold for mandatory taxation starting at N25 million in annual profit. The clarification distinguishes between individual content creators and registered businesses, emphasizing that the latter may be subject to tax depending on their income and structure.
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“FIRS does not tax Personal Income Tax, States governments do.
“FIRS collects Company Income Tax. Only those who are corporate names and earn profit of N25 million and more are required to pay tax,’’ the source told Vanguard.
The News Agency of Nigeria (NAN) reports that a section of the media recently quoted the FIRS as saying that media content creators and influencers constituted a major block of tax evaders.
While individual creators may be exempt from direct FIRS taxation, it’s important to note that other tax regulations might apply depending on their income source and earning structure. Seeking professional guidance or consulting specific tax regulations remains crucial for content creators to ensure compliance and avoid potential issues.
This situation underscores the evolving nature of the online content creator industry and the need for comprehensive tax frameworks that consider diverse income streams and business models within the digital realm. Further clarification and open communication between tax authorities and content creators are crucial to ensure sustainable growth and compliance in this dynamic sector.