Nigerians using MailChimp will have to pay 7.5% more from April 20, 2023, as the company is set to implement the 7.5% VAT in line with the Nigerian government policy.
In a notice sent to the customers MailChimp said that this would take effect from April 20 2023 and will apply to all customers that have Nigeria as their account’s primary contact address.
“The VAT that MailChimp collects will be paid to the Nigerian tax authority” the company said in the notice.
To get VAT invoices, customers have to update their MailChimp account before April 2020.
Why is this?
Last year, the federal government introduced a policy that requires foreign digital services providers in Nigeria to collect and remit Value Added Tax to the Federal Inland Revenue Services.
“Section 30 of the Finance Act, designed to amend sections 10, 31, and 14 of VAT is in relation to VAT obligations for non-resident digital companies, and the mechanisms that will be used is to restrict VAT obligations mainly to digital non-resident companies who supply individuals in Nigeria, who can’t themselves account for VAT” the finance minister Zainab Ahmed had said when presenting the 2022 budget in Abuja, last year.
The Act empowered the FIRS to tax the profits of a company, any trade or business without a base in Nigeria but transmits, emits, or receives signals, sounds, messages, images, or data of any kind by cable, radio, electromagnetic systems or any other electronic or wireless apparatus to Nigeria in respect of any activity.
It added that such assessment and charge would be a fair and reasonable percentage of the turnover attributable to that presence. And listed those businesses to include; electronic commerce, application store, high-frequency trading, electronic data storage, online adverts, participative network platform, online payments, etc.
How To Get Your VAT Invoice From Your MailChimp Account
- Login to your MailChimp account
- Click your profile name or icon and choose Accounts & Billing;
- Click the Billing drop-down menu and choose Billing Information;
- Click Edit Tax Settings;
- In the Pop-Up modal, scroll down to the Tax ID section and type in your valid VAT number in the field;
- Click Save.
- Continue to the next section to complete the process;
- After you have added your VAT ID, navigate to the Billing information page in your account;
- Scroll to the Notification section and check the Label Receipts As Invoices
Implication for business owners
E-mail marketing is a trend that has become more popular in recent times. With email marketing platforms like MailChimp, business owners have been able to build email lists and maintain friendly customer relationships with their lead prospects.
This new development means that business owners who use MailChimp will now have to factor in an additional 7.5% cost into their email marketing budget.
