FG rakes in over N600bn VAT from Facebook, Amazon, Netflix

Nigeria has raked in over N600bn in Value Added Tax (VAT) from foreign digital giants including Facebook, Amazon and Netflix, a senior government official has disclosed.

The Special Adviser on Tax Policy to the Chairman of the Presidential Committee on Tax Reforms, Mr. Mathew Osanekwu, said the collections followed amendments to the VAT Act, which empowered the Federal Inland Revenue Service to tax non-resident companies offering services in the country.

“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 told journalists at a media workshop in Abuja on Wednesday.

He explained that the move ensures Nigeria benefits from taxes on services consumed locally but delivered by foreign firms, stressing that the arrangement mirrors global best practices.

At the same event, the Federal Government dismissed speculation that President Bola Tinubu’s fiscal and tax reforms had created new levies.

Chairman of the tax reforms committee, Professor Taiwo Oyedele, said the administration’s focus was to simplify the system, protect low-income earners, and ensure fairness.

“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 stated.

He recalled that in July 2023, Tinubu suspended four taxes hurriedly introduced in the last days of the previous government, including excise duties on plastics and vehicle imports.

“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, noting that even the controversial Cybersecurity Levy predated the current administration.

The reforms, which come into force in January 2026, are designed to consolidate multiple levies, eliminate duplication, and tie collections to transparent, project-driven spending.

Under the new framework, Nigerians earning less than N800,000 annually will be exempt from personal income tax, while small businesses with yearly turnover below N100m will face 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 said.

He warned that Nigeria’s economy was on the brink of collapse in May 2023, with depleted reserves, subsidy-induced debts, and minimal crude available for sale. According to him, continuing to fund subsidies with borrowed money backed by future crude sales would have left the country unable to import fuel.

“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.