Nigeria has successfully collected over ₦600 billion in Value Added Tax (VAT) from global digital service providers such as Facebook, Amazon, and Netflix, the Special Adviser on Tax Policy to the Chairman of the Tax Reforms Committee, Mr Mathew Osanekwu, revealed.
“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 stated during a workshop for media practitioners in Abuja on Wednesday.
He explained that amendments to the VAT Act empowered the Federal Inland Revenue Service (FIRS) to bring non-resident companies offering services in Nigeria into the tax net. The move aligns with global best practices and ensures Nigeria benefits from taxes on services consumed locally but delivered by foreign firms.
No New Taxes Under Tinubu Administration
The Federal Government also clarified that President Bola Tinubu’s ongoing fiscal and tax reforms have not introduced any new taxes, countering widespread speculation.
“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,” explained Professor Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms.
Oyedele noted that controversial levies, including the five per cent fuel surcharge, were provisions in long-standing laws predating the current administration. He also reminded participants that in July 2023, President Tinubu suspended excise duties on plastics and vehicle importation, which had been hurriedly introduced during the final days of the previous government.
“Many of us are not even aware because this president did not allow those taxes to take effect. They were suspended and eventually removed,” Oyedele added. He clarified that the Cybersecurity Levy was enacted years ago, and not originated by Tinubu’s administration.
Progressive Tax Reforms to Take Effect in 2026
The tax reforms, set to take effect in January 2026, aim to overhaul Nigeria’s weak tax system, broaden the revenue base, and improve compliance. Nigeria’s tax-to-GDP ratio currently stands at about 10.8 per cent, well below Africa’s 16 per cent average and the global benchmark of 30 per cent.
“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 noted. Under the new framework, personal income tax thresholds have been adjusted so Nigerians earning less than ₦800,000 annually pay no tax on that amount, while small businesses earning under ₦100 million per year enjoy a 0 per cent corporate tax rate.
Oyedele painted a sobering picture of Nigeria’s economic state in May 2023. “The country was on the verge of collapse. Foreign reserves were heavily encumbered by unpaid forward contracts and subsidy-induced debt by the Nigerian National Petroleum Company Limited (NNPCL). With barely 200,000 barrels of free crude available due to pre-sales, Nigeria’s fiscal system was running on fumes.”
He warned that continuing to finance fuel subsidies with borrowed money secured against future crude production could have led to a total shutdown of fuel imports, similar to Sri Lanka’s crisis.
“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?” Oyedele asked.
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