Nigeria is pulling off what many countries are still struggling to do: make Big Tech pay up. Global giants like Facebook, Amazon, and Netflix have coughed up more than ₦600 billion ($400M+) in VAT, thanks to a change in the country’s tax rules.
The move is part of a broader push by Nigeria to fix its leaky tax system and expand beyond oil revenues. In 2022, lawmakers amended the VAT Act, giving the Federal Inland Revenue Service (FIRS) the power to rope in non-resident companies offering services to Nigerians. In practice, that means global platforms are now registered locally and serve as tax collection agents.
“These are not Nigerian entities, but they are now paying VAT under Section 10 of the VAT Act,” explained Mathew Osanekwu, Special Adviser on Tax Policy. “They’re registered in Nigeria and appointed as agents of collection.”
Why it matters
This isn’t just about cash—though ₦600 billion is no small sum. It signals how aggressively Nigeria is moving on tax reforms, at a time when the government is chasing more revenue and trying to level the playing field for local businesses.
Starting January 2026, new rules will also exempt low-income earners (below ₦800,000 annually) from personal income tax and give tax breaks to small businesses with less than ₦100 million turnover. On the flip side, big corporations and high-income earners will carry more of the load.
The bigger picture
Digital taxes are a hot topic globally. The EU and OECD have tried (and struggled) to pin down multinationals with uniform rules. Nigeria is now showing that emerging markets can leap ahead—especially where governments see a chance to capture value from the digital economy.
For startups and investors, the message is clear: Africa’s biggest economy is serious about tax compliance, and that could reshape margins, competition, and pricing for digital services across the region.
Not a new tax
To be clear, the government insists it isn’t adding more taxes—just tightening up old ones. Even the controversial Cybersecurity Levy wasn’t cooked up by the Tinubu administration; it was legislated years ago.
Bottom line
With over ₦600 billion already collected and a broader reform package coming in 2026, Nigeria is positioning itself as a global test case for digital taxation. If successful, it could inspire other African markets—and give global Big Tech fewer excuses to dodge taxes elsewhere.
