The Federal Government says over N600 billion has been harvested in Value Added Tax (VAT) from international digital service providers, including Facebook, Amazon and Netflix.
The Special Adviser on Tax Policy to the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mathew Osanekwu, explained that amendments to the VAT Act empowered the Federal Inland Revenue Service to bring non-resident companies offering services in Nigeria into the tax net.
He noted that under Section 10 of the VAT Act, these companies are now registered in Nigeria and appointed as agents of collection, ensuring that foreign entities providing services consumed locally also remit VAT.
Also speaking at a workshop for media practitioners in Abuja, the Chairman of the tax reforms committee, Taiwo Oyedele, clarified that the administration of President Bola Tinubu has not introduced new taxes, contrary to speculation.
He said many of the levies being debated, such as the five per cent fuel surcharge, are provisions of existing laws and not new measures. Oyedele challenged critics to identify any tax newly created by the current administration.
He recalled that in July 2023, barely two months after assuming office, President Tinubu signed four executive orders suspending taxes that had been hurriedly introduced at the end of the previous administration, including excise duties on plastic products and vehicle importation.
He added that the controversial cybersecurity levy was also not a creation of the Tinubu government but a provision in laws passed years earlier.
According to Oyedele, the comprehensive reforms set to take effect in January 2026 are designed to ease the tax burden on low- and middle-income earners while ensuring fairness across the board. Individuals earning less than N800,000 annually will be exempted from personal income tax, while small businesses with turnover below N100 million per year will enjoy a zero per cent corporate tax rate.
He stressed that the framework seeks to consolidate multiple taxes, remove overlapping charges, and tie levies to transparent, project-linked spending.
The goal, he said, is to make Nigeria’s tax system more progressive by eliminating taxes on the poor, reducing burdens on the middle class, and fairly taxing higher-income earners.
Oyedele also provided insight into the state of the economy as of May 2023, describing it as “on the verge of collapse.”
He said Nigeria’s foreign reserves were heavily encumbered by unpaid forward contracts and subsidy-related debts by the Nigerian National Petroleum Company Limited, leaving the country with barely 200,000 barrels of free crude due to pre-sales.
He warned that continuing to finance fuel subsidies with borrowed money secured against future crude would have eventually led to a total shutdown of fuel imports, similar to the crisis in Sri Lanka.
He concluded by noting that while many Nigerians may question whether living conditions have improved since Tinubu assumed office, the more relevant question is whether the situation would have been far worse had the reforms not been introduced.
