Thursday, September 11, 2025 - The Special Adviser on Tax Policy to the Chairman of the Tax Reforms Committee, Mr Mathew Osanekwu, has revealed that Nigeria has successfully collected over N600bn in Value Added Tax from global digital service providers such as Facebook, Amazon, and Netflix.
He explained that amendments to the VAT Act had empowered
the Federal Inland Revenue Service to bring non-resident companies offering
services in Nigeria into the tax net. “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 stressed that the move aligns with global best practices
and ensures Nigeria benefits from taxes on services consumed locally but
delivered by foreign companies.
Also at the event, the Federal Government clarified that
President Bola Tinubu’s ongoing fiscal and tax reforms have not introduced any
new taxes, contrary to widespread speculat
Chairman of the Presidential Committee on Fiscal Policy and
Tax Reforms, Professor Taiwo Oyedele, explained that the reforms were designed
to ease the tax burden on low- and middle-income earners while ensuring equity
and fairness.
According to him, many of the levies being debated in the
public space, including the controversial five per cent fuel surcharge, are not
new but provisions in long-standing laws predating the current administration.
“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 reminded participants that in July 2023, barely two
months after assuming office, President Tinubu signed four executive orders
suspending taxes that had been hurriedly introduced during the final days of
the previous administration. These included 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 added. He further clarified that the much-debated
Cybersecurity Levy was enacted years ago, stressing that Tinubu’s
administration did not originate it.
The tax reforms, which take effect in January 2026, are part
of efforts 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, one of the lowest globally and far below the African average of 16
per cent and the global benchmark of 30 per cent.
Oyedele emphasised that the reforms aim to consolidate
multiple taxes, remove overlapping charges, and tie levies to transparent,
project-linked spending. He stressed that the framework is progressive,
protecting vulnerable groups while fairly taxing higher earners.
Under the reforms, personal income tax thresholds have been
adjusted to ensure that Nigerians earning less than ₦800,000 annually will pay no tax on that amount.
Similarly, small businesses earning under ₦100m
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
targets higher-income earners fairly,” Oyedele noted.
He also painted a sobering picture of Nigeria’s economic
state as of May 2023, describing it as “on the verge of collapse.”
According to him, the country’s 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 argued that continuing to finance fuel subsidies with
borrowed money secured against future crude production would have led to a
total shutdown of fuel imports, similar to the crisis in Sri Lanka.
“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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