In recent years, social media has provided a vibrant platform for Nigerians to showcase their talents and earn big even in foreign currencies.
However, unlike what obtains in other countries, content creators and influencers barely pay tax from the fortunes they make in the digital space owing to what experts identify as lapses in Nigeria’s tax laws.
The tax record of Ibrahim Ajibade, a clerk at a consulting firm in Lagos and that of an average Nigerian social media content creator, presents a stark twist of irony. Ajibade, like every civil servant in Nigeria, pays tax from his N70,530 gross earning every month.
In contrast, skit makers, YouTubers, TikTokers and influencers manage to evade tax despite earning bigger. Yet, they access – at little or no costs – infrastructural facilities such as roads and hospitals constructed with funds raised from taxes paid by poor salary earners like Ajibade and others.
As the government grapples with dwindling revenues and mounting public debts hovering above N87 trillion, these entertainers lead an income tax-free, luxury lifestyle, building mansions in choice areas and riding expensive vehicles.
The online creative industry is a goldmine with skit making alone ranked by Dataleum “as the third largest entertainment industry in Nigeria with a net worth of over N50 billion”.
Nigeria boasts of a population estimated at over 200 million and high social media users, thereby providing a huge local market for content creators and influencers, aside from the global reach.
A report by DataReportal revealed that in January 2023, Nigeria’s internet users were 122.5 million, even though the internet penetration in the country stood at 55.4 per cent – meaning that 98.63 million people did not use the internet at the time.
Facebook had 21.75 million users, YouTube, 31.60 million; Instagram, 7.10 million; LinkedIn, 7.50 million; Snapchat, 12.35 million while Twitter had 4.95 million users.
As of 2021, a popular skit maker, Samuel Animashaun Perry, well known as BrodaShaggi, grossed up to N3 million from a sponsored post, Daily Trust on Sunday gathered.
He charged N500, 000 for a featured post (client’s picture or a video advert) on his Instagram timeline for 24 hours, N1 million for seven days and N1.5 million to leave the post permanently.
“Content creation, development, execution delivery and posting” for a client attracts N2.5 million on his Twitter handle; N2.6 million on YouTube page; N2.7 million on Facebook; N2.8 million on Instagram and N3 million on all social media platforms.
“The rates are subject to change, and once payment has been made, there would be no refund,” a document obtained by Daily Trust on Sunday stated.
Although his current charges could not be ascertained, they are expected to have been reviewed upwards given the growing acceptance of digital marketing in Nigeria.
Aside from the huge incomes they earn from brand promotion and endorsements, the contents they post on YouTube, Facebook, Instagram, TikTok, among others are monetized – in dollars – based on the number and duration of views.
The views are usually in millions, literally translating to more money for the creators. For instance, in the first quarter of 2023, Mark Angel led the pack of top 10 Instagram skit makers with his videos garnering a whopping 43.7 million views, according to Dataleum.
He was followed by Emmanuel Chukwuemeka Ejekwu, aka Sabinus, with 31.7 million views and BrodaShaggi, with 30.3 million.
Like skit makers, influencers are ambassadors of top brands; they rake in millions from endorsements to promote products on social media.
And Nigeria has them in numbers. The leading ones on Instagram, for instance, are ace hip hop artiste, David Adeleke, well known as Davido, with 28.7 million followers; his colleague, Ayodeji Balogun, aka Wizkid, with 18.3 million followers; Damini Ogulu, aka Burna Boy, with 16.4 million followers; Marvin record label CEO, Michael Ajereh alias Don Jazzy, with 15.2 million followers; ace Nollywood actress Ini Edo, with 14 million followers; actress and film producer, Regina Daniels, with 14.2 million followers.
Other top influencers on Instagram include Chairman, Five Star Group, Dr. E-Money, with 13.6 million followers; popular singer, Peter Okoye aka Mr P, with 12.3 million followers; Simisola Ogunleye popularly known as Simi, with 12.4 million followers and ace rapper, Olamide Adedeji, aka Olamide Badoo, with 11.6 million followers.
Among Nigeria-based top influencers on TikTok are Maduakor Chisom Faustina fondly called Berby Picxy, with 10.1 million followers; Chinese Elijah aka Crispdal, with 8.9 million followers; Peace Pever Anpee aka Purple Speedy, with 9.5 million and Chukwudike Akuwudike Damian alias iamdikeh, with 7.5 million followers.
Untapped goldmine for govt.
The incomes, which content creators and influencers generate from skit video views and brand promotion, mostly escape the tax net.
The chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, recently disclosed that Nigeria was losing about N20 trillion (about $26 billion) annually to tax evasion and inefficiencies in tax collection modes.
The National Bureau of Statistics (NBS) had, in August 2023, said that foreign firms, including Google, Netflix and Facebook, paid about N2 trillion in taxes into the federal government’s account in 15 months.
Taiwo oyedele, chairman, presidential committee on fisical policy and tax reforms
We’ll enforce payment- FIRS
The Federal Inland Revenue Service (FIRS) said social media content creators and influencers constituted a major block of tax evaders.
“They are not paying,” Dare Adekambi, Special Adviser on Media to the chairman of the FIRS, stated when asked if Nigerian content creators file tax returns.
“Skit makers, influencers and other content creators who are making money using digital platforms need to be paying tax.
There is a law in Nigeria that requires everybody who earns income to pay tax. They earn in dollars. Tax is a civic obligation; civil servants are paying, so they also have to pay.
“The CAC’s Registrar-General and the FIRS’ chairman recently discussed how they can work together in bringing them into the tax net. The challenge is how to track them, but we are looking into it,” Adekambi said.
He said the FIRS would meet with content creators and influencers and make them see why they should voluntarily pay tax.
“But if our friendly approach is taken for granted, then we will go for enforcement,” he added.
He said the FIRS would use data and technology to scale up tax revenues.
“If Facebook, Instagram, Twitter and other social media platforms are paying taxes to the government, why would people using those platforms to create content and make money not pay? By the time a committee is a set up to look into it, a broad spectrum of activities will be covered.