Nigeria: Guidelines to simplify the compliance regime for goods sold through digital means postponed indefinitely

The guidelines were scheduled to become effective from 1 January 2024.

The guidelines were scheduled to become effective from 1 January 2024.

The Nigerian Federal Inland Revenue Service (FIRS) on 15 January 2024 announced the indefinite postponement of the implementation of the guidelines [PDF 826 KB] to simplify the compliance regime for goods sold through digital means (e.g., marketplace, platform, app, portal, etc.) by nonresident vendors. The guidelines were scheduled to become effective from 1 January 2024.

The announcement emphasizes that the postponement is to allow the FIRS to finalize the development of a seamless process for value added tax (VAT) compliance. It also clarifies that the postponement does not impact the simplified regime for digital services but only applies to goods.

The FIRS originally introduced the simplified compliance regime for nonresident vendors under guidelines published in October 2021 (the guidelines). These guidelines stipulate that the simplified compliance regime is effective from 1 January 2022 for digital services, and from 1 January 2024 for goods sold through digital means to customers in Nigeria.

KPMG observation

The guidelines require nonresident vendors that sell goods via digital means to customers in Nigeria to register for VAT in Nigeria, if among other things, they meet an annual sales threshold of U.S. $25,000. Goods sold via digital means are considered sold in Nigeria if they are physically present in Nigeria at the time of sale, imported into Nigeria, assembled in Nigeria, or installed in Nigeria. Additionally, if the beneficial owner of the rights in or over the goods is a taxpayer in Nigeria and the goods or rights are situated, registered, or exercisable in Nigeria, the goods are considered sold in Nigeria. Goods are also considered sold in Nigeria, and therefore taxable, if the delivery address is in Nigeria.

While the FIRS notice states that the postponement applies to “low-value goods” sold via digital means to customers in Nigeria, the guidelines do not define a low-value goods threshold, nor do they restrict the simplified compliance regime to only low-value goods. As such, it is not clear if the postponement applies to a specific class of goods that are yet to be defined, or to all goods sold via digital means as provided under the guidelines.

Furthermore, it is also unclear how the postponement and the still undefined “low-value goods regime” will interact with the current customs clearance procedure for imported goods. Therefore, the FIRS is expected to issue further guidance in this regard.

For more information, contact a KPMG tax professional:

Philippe Stephanny |

Chinedu Nwachukwu |



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