Abuja, Nigeria — Nigeria has successfully collected over ₦600 billion in Value Added Tax (VAT) from major international digital service providers, including Facebook, Amazon, and Netflix. This milestone was achieved following strategic amendments to the country’s VAT Act, which brought non-resident companies into Nigeria’s tax net.
The significant collection was disclosed by Mr. Mathew Osanekwu, Special Adviser on Tax Policy to the Chairman of the Tax Reforms Committee, at a media workshop in Abuja. He explained that these foreign firms now pay VAT under Section 10 of the Act and are registered as collection agents in Nigeria.
“These are not Nigerian entities, but they are now paying VAT under Section 10 of the VAT Act,” Osanekwu said, describing the measure as an alignment with global best practices that ensures the nation benefits from taxes on services consumed locally.
Government Clarifies Fiscal Reforms
At the same event, the Federal Government moved to reassure the public that its fiscal reforms are not about imposing new taxes. Professor Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, challenged critics to name a single newly introduced tax by the current administration. He noted that President Bola Tinubu had already suspended and eventually removed several taxes imposed by the previous government, including excise duties on plastic items and vehicle imports.
According to Oyedele, the reforms, set to take effect from January 2026, are designed to overhaul Nigeria’s tax system, broaden the revenue base, and improve compliance. The goal is to address Nigeria’s low tax-to-GDP ratio, which currently stands at just 10.8 percent, well below Africa’s average of 16 percent.
Oyedele emphasized that the reforms are the most progressive in the country’s history. He highlighted key benefits, including the elimination of personal income tax for Nigerians earning less than ₦800,000 annually and a zero-percent corporate tax rate for small businesses with an annual turnover below ₦100 million.
The chairman also painted a stark picture of the economy as of May 2023, stating it was “on the verge of collapse” due to subsidy debts and crude pre-sales. He argued that the tough reforms were necessary to prevent a total shutdown of fuel imports, similar to the crisis that occurred in Sri Lanka. “The right question is: would life have been better today if those reforms hadn’t happened?” he asked, defending the administration’s actions.
