FG Collects N600bn VAT from Facebook, Amazon, and Netflix Amid Tax Reforms

Nigeria collects ₦600bn VAT from Facebook, Amazon, Netflix, and other global firms. Learn how FG’s tax reforms improve fairness and broaden revenue.

Nigeria Collects ₦600bn VAT from Global Digital Giants

The Federal Government of Nigeria has revealed that it has successfully collected over ₦600 billion in Value Added Tax (VAT) from international digital service providers such as Facebook, Amazon, and Netflix.

According to Mr. Mathew Osanekwu, Special Adviser on Tax Policy to the Tax Reforms Committee Chairman, this milestone was made possible through amendments to the Value Added Tax Act. These amendments empower the Federal Inland Revenue Service (FIRS) to bring foreign companies offering services in Nigeria into the tax system.

“These are not Nigerian entities, but they are now paying VAT under Section 10 of the VAT Act. They are registered in Nigeria and also appointed as agents of collection,” Osanekwu explained during a tax workshop in Abuja.

For more details, visit the FIRS official website.

How FG’s Tax Reforms Work

The tax reforms are part of President Bola Tinubu’s fiscal and tax reform agenda, aimed at ensuring fairness and expanding Nigeria’s tax revenue. Contrary to speculations, the government confirmed that no new taxes have been introduced.

Key points of the reforms include:

VAT on foreign companies providing digital services in Nigeria.
Suspension of multiple taxes introduced by the previous administration.
Exemption for low-income earners and small businesses.
Focus on fairness by taxing higher-income earners more than the poor and middle class.

Professor Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, emphasized that the reforms were designed to ease the tax burden while ensuring equity.

No New Taxes – Only Fairer Distribution

Oyedele clarified that President Tinubu’s reforms are not about imposing new taxes but rather about:

Consolidating multiple levies.
Removing overlapping charges.
Linking tax revenues to transparent and project-based spending.

He stressed that the much-debated Cybersecurity Levy was enacted years ago and not introduced by the current administration. Similarly, earlier executive orders signed by Tinubu in July 2023 suspended excise duties on plastics and imported vehicles.

Learn more about Nigeria’s tax laws on the Central Bank of Nigeria’s portal.

Tax Reliefs for Nigerians and Small Businesses

One of the most progressive aspects of the reforms is the relief provided to low and middle-income Nigerians:

Individuals earning less than ₦800,000 annually will pay no personal income tax.
Small businesses earning below ₦100 million annually will enjoy a 0% corporate tax rate.
Taxes are now structured to protect vulnerable groups while ensuring higher earners contribute more.

This balance makes the reforms the most progressive tax changes in Nigeria’s history, according to Oyedele.

Why the Reforms Are Necessary

As of May 2023, Nigeria’s economy was in a fragile state. Oyedele revealed that:

The country’s foreign reserves were heavily encumbered due to unpaid forward contracts.
Fuel subsidies created debt burdens linked to the Nigerian National Petroleum Company Limited (NNPCL).
With only 200,000 barrels of free crude available, the fiscal system was “running on fumes.”

Had reforms not been introduced, Nigeria risked facing a Sri Lanka-style economic collapse, where fuel imports could have stopped entirely due to lack of funds.

FG’s Tax Reforms Are a Step Toward Stability

The collection of ₦600 billion VAT from global companies like Facebook, Amazon, and Netflix marks a major step in broadening Nigeria’s tax base and ensuring fairness. By exempting low-income earners and small businesses, the Federal Government is striking a balance between economic growth and social equity.

Interested readers can apply these insights by staying updated on FIRS policies and monitoring Nigeria’s ongoing fiscal reforms.

With tax reforms set to fully take effect in January 2026, the move signals a new era of fairness, transparency, and sustainability in Nigeria’s economic system.