Nigerian tech startups now in their hundreds are increasingly being frustrated by global Original Equipment Manufacturers (OEMs) who connive with some overseas based distributors to ship their products into Nigeria without paying value added tax (VAT) and allied taxes.
Investigation revealed that Oracle, Microsoft, Dell EMC, a subsidiary of Dell Technologies, lead the OEMs, which collude with overseas based distributors to bring their products through some not-so-opaque channels with intent to evade taxes thus shortchanging the Nigerian government by undercutting prices of technology products sold in Nigeria.
The connivance has made many Nigerian tech startups to be frustrated out of business because they are not able to compete with the overseas based distributors after they have creamed off 7.5 per cent VAT on their products.
Nigerian tech startups and the nation at large, some Nigerian banks and large corporates have fallen under the trick of these distributors in patronage because by patronizing them, the banks don’t have to pay VAT.
The Nigerian tech community is worried, describing the development as a huge economic drain on the country and economic sabotage for some Nigerian banks and corporates to keep patronizing these OEMs and their distributors knowing full well that the distributors are undermining the nation’s tax policy. They called on the relevant authorities to look into the anomaly and sanction companies promoting such tax evasion scheme.
THISDAY investigation showed that the collusion between the OEMs and the foreign-based distributors only applies to Nigeria.
Attempts by the OEMs and their collaborators to extend the tax-evasion strategy to South Africa and Egypt, two African nations that share high GDP with Nigeria, were rebuffed by the relevant authorities in both countries.
Some of the tech startups who spoke at a seminar in Abuja recently, wondered if the Federal Inland Revenue Service (FIRS) and the Ministry of Communications and Digital Economy, the supervising ministry of the National Information Technology Development Agency (NITDA), were aware of the ongoing economic sabotage.
THISDAY gathered that some of the tech startups were already mobilizing some members of the National Association of Nigerian Students (NANS) to picket the offices of FIRS, the Ministry of Communications and Digital Economy in order to compel them to investigate the activities of the OEMs and their collaborators. They also plan a four day shut down demonstration of the offices of the OEMS in Nigeria claiming that Nigerians have been exploited enough.
Source: Thisday
