Nigeria has collected over N600 billion in Value Added Tax (VAT) from global digital giants like Facebook, Amazon, and Netflix.
According to Mr. Mathew Osanekwu, Special Adviser on Tax Policy to the Chairman of the Tax Reforms Committee, amendments to the VAT Act empowered the Federal Inland Revenue Service to bring non-resident companies offering services in Nigeria into the tax net.
The VAT collection aligns with global best practices, ensuring Nigeria benefits from taxes on services consumed locally but delivered by foreign companies. These companies are now registered in Nigeria and appointed as agents of collection, paying VAT under Section 10 of the VAT Act.
The Federal Government clarifies that President Bola Tinubu’s ongoing fiscal and tax reforms haven’t introduced new taxes, contrary to widespread speculation. Nigerians earning less than ₦800,000 annually will pay no personal income tax, and small businesses with annual turnover below ₦100 million will enjoy a 0% corporate tax rate.
Professor Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, emphasized that the reforms are designed to ease the tax burden on low- and middle-income earners while ensuring equity and fairness. He also noted that Nigeria’s tax-to-GDP ratio currently stands at 10.8%, far below the African average of 16% and the global benchmark of 30%.
The reforms, set to take effect in January 2026, aim to overhaul Nigeria’s weak tax system, broaden the revenue base, and improve compliance. Oyedele stressed that the framework is progressive, protecting vulnerable groups while fairly taxing higher earners.
