Nigeria has collected more than ₦600 billion in Value Added Tax (VAT) from international digital service providers, including Facebook, Amazon, and Netflix, following amendments to the VAT Act that brought non-resident companies into the country’s tax net.
The disclosure was made on Wednesday, September 10, by Mr. Mathew Osanekwu, Special Adviser on Tax Policy to the Chairman of the Tax Reforms Committee, during a workshop for media practitioners in Abuja.
Osanekwu explained that under Section 10 of the VAT Act, foreign firms are now registered in Nigeria and serve as collection agents for the Federal Government.
“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,” he said, describing the measure as one aligned with global best practices to ensure the country benefits from services consumed locally but delivered by foreign providers.
At the same event, the Federal Government moved to calm public concerns over possible new levies. The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Professor Taiwo Oyedele, stressed that President Bola Tinubu’s fiscal reforms have not introduced any new taxes.
“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 said.
He recalled that in July 2023, President Tinubu signed four executive orders suspending levies imposed in the final days of the Buhari administration, including excise duties on plastics and vehicle imports. He also clarified that the controversial Cybersecurity Levy was legislated years earlier and not introduced by the current administration.
Oyedele said the reforms, due to commence in January 2026, are designed to overhaul Nigeria’s fragile tax system, broaden the revenue base, and strengthen compliance. With Nigeria’s tax-to-GDP ratio at 10.8 percent—far below the African average of 16 percent—he argued that consolidation of multiple levies will eliminate overlaps and tie taxes directly to projects.
Under the reforms, Nigerians earning less than ₦800,000 annually will be exempt from personal income tax, while small businesses with an annual turnover below ₦100 million will pay zero corporate tax.
“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 said.
He, however, painted a bleak picture of the fiscal situation inherited in May 2023, warning that foreign reserves weighed down by subsidy debts and crude pre-sales had left the economy “running on fumes.” Without subsidy reforms, he said, Nigeria risked facing a fuel import collapse similar to Sri Lanka’s crisis.
