Nigeria has collected more than ₦600bn in Value Added Tax (VAT) from international digital service providers including Facebook, Amazon, and Netflix, following recent tax reforms.
Mr. Mathew Osanekwu, Special Adviser on Tax Policy to the Chairman of the Tax Reforms Committee, disclosed this in Abuja during a workshop for journalists on Wednesday.
He explained that amendments to the VAT Act empowered the Federal Inland Revenue Service (FIRS) to capture non-resident companies delivering services in Nigeria.
“These are not Nigerian entities, but they are now paying VAT under Section 10 of the VAT Act. They are registered in Nigeria and are also appointed as agents of collection,” Osanekwu said, adding that the move aligns with international standards and ensures the country benefits from taxes on locally consumed digital services.
At the same event, the Federal Government clarified that President Bola Tinubu’s administration has not imposed any new taxes, contrary to widespread assumptions.
Professor Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, said the reforms were intended to reduce the tax burden on low- and middle-income earners while ensuring fairness in the system.
“It’s not a new tax. Some said the tax is being proposed. The tax is not being proposed. Some believe this president has introduced tax after tax, and I challenge them to point to one newly introduced tax,” Oyedele stated.
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He recalled that in July 2023, barely two months after assuming office, President Tinubu suspended several taxes introduced at the end of the previous administration, such as excise duties on plastics and vehicle imports.
He also clarified that the controversial Cybersecurity Levy was not a Tinubu initiative but a provision that predated his government.
The reforms, which will officially take effect in January 2026, are aimed at broadening Nigeria’s weak revenue base, streamlining levies, and improving compliance. Nigeria’s tax-to-GDP ratio currently stands at 10.8 per cent — well below the African average of 16 per cent and the global benchmark of 30 per cent.
According to Oyedele, the new framework is progressive, shielding vulnerable groups while ensuring higher earners pay a fairer share. Under the plan, individuals earning less than ₦800,000 annually will be exempt from personal income tax, while small businesses making below ₦100m yearly will enjoy a 0 per cent corporate tax rate.
“This reform is the most progressive Nigeria has ever seen. It eliminates taxes on the poor, reduces the burden on the middle class, and targets higher-income earners fairly,” Oyedele stressed.
He also painted a grim picture of Nigeria’s fiscal state before Tinubu assumed office in May 2023, noting that the economy was “on the verge of collapse.” With foreign reserves tied up in unpaid forward contracts and debts from fuel subsidies, and only 200,000 barrels of free crude available due to pre-sales, he warned that the country risked a Sri Lanka-style fuel import shutdown.
“People may ask whether life is better now than it was two years ago. The right question is: would life have been better today if those reforms hadn’t happened?” he asked.
