THE Federal Government has disclosed that it has successfully collected over ₦600 billion in Value Added Tax (VAT) from international digital service providers such as Facebook, Amazon, and Netflix, marking a milestone in Nigeria’s expanding tax net.
News Point Nigeria reports that the revelation was made by Mr. Mathew Osanekwu, Special Adviser on Tax Policy to the Chairman of the Presidential Committee on Tax Reforms, during a media workshop in Abuja on Wednesday.
According to Osanekwu, amendments to the VAT Act now empower the Federal Inland Revenue Service (FIRS) to mandate non-resident companies offering services in Nigeria to pay VAT.
“These are not Nigerian entities, but they are now paying VAT under Section 10 of the VAT Act. They are registered in Nigeria and appointed as agents of collection,” Osanekwu said, stressing that the move aligns with global best practices and ensures Nigeria benefits from taxes on services consumed locally but delivered by foreign firms.
Also addressing participants, Professor Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, debunked speculation that the administration of President Bola Tinubu had introduced multiple new taxes.
Oyedele explained that the ongoing reforms were not about raising new levies but about equity, fairness, and consolidation.
“It’s not a new tax. Some believe this President has introduced tax after tax, and I challenge them to point to one newly introduced tax,” Oyedele stated.
He reminded Nigerians that in July 2023, barely two months into his tenure, President Tinubu signed four executive orders suspending taxes imposed in the final days of the previous administration, including excise duties on plastic items and vehicle importation.
“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 said.
He further clarified that the much-debated Cybersecurity Levy was an old law, not a creation of the Tinubu government.
The fiscal and tax reforms, expected to take effect in January 2026, are designed to overhaul Nigeria’s weak tax system, broaden the revenue base, and improve compliance.
Nigeria’s current tax-to-GDP ratio stands at 10.8 per cent, far below the African average of 16 per cent and the global benchmark of 30 per cent.
The new framework seeks to: eliminate multiple and overlapping taxes, tie levies to transparent, project-linked spending, protect low- and middle-income earners and shift the burden fairly towards higher-income groups.
Under the reforms, personal income tax thresholds have been adjusted so that Nigerians earning less than ₦800,000 annually will pay no tax on that amount, while small businesses with earnings below ₦100 million per year 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 fairly taxes higher-income earners,” Oyedele said.
Painting a stark picture of the economy Tinubu inherited, Oyedele revealed that as of May 2023, Nigeria’s finances were “on the verge of collapse.”
Foreign reserves were heavily encumbered by unpaid forward contracts, while fuel subsidies had saddled the country with unsustainable debts.
With barely 200,000 barrels of free crude available due to pre-sales, Nigeria’s fiscal system was, in his words, “running on fumes.”
Continuing subsidy financing with borrowed money, Oyedele argued, could have pushed Nigeria into a fuel import crisis similar to Sri Lanka’s economic meltdown.
“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 rhetorically.
With ₦600bn already collected from global digital platforms and sweeping reforms underway, government officials insist Nigeria is finally on course to build a tax system that is fair, sustainable, and capable of financing development without overburdening the poor.