Nigeria Nets ₦600bn VAT from Facebook, Amazon, Netflix as Digital Tax Reforms Reshape Fiscal Landscape

Nigeria’s decision to bring foreign digital service providers into its tax net is beginning to pay off, with more than ₦600 billion in Value Added Tax (VAT) collected from platforms like Facebook, Amazon, and Netflix. The landmark development underscores the growing importance of digital taxation in diversifying government revenue and reducing dependence on oil.

The disclosure was made by Mr. Mathew Osanekwu, Special Adviser to the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms on Tax Policy, at a media workshop in Abuja. According to him, the milestone was achieved following amendments to the VAT Act, which enabled the Federal Inland Revenue Service (FIRS) to enforce tax collection from non-resident companies operating in Nigeria’s digital economy.

“These are not Nigerian entities, but they are now remitting VAT under Section 10 of the VAT Act,” Osanekwu explained. “They are in Nigeria and also licensed as collection agents.”

For years, global tech giants have reaped billions in revenue from Nigerian users without direct taxation. That gap has now narrowed, with the government aligning its tax policies with international best practices, ensuring that services consumed locally, from streaming movies to e-commerce transactions, attract VAT just as local businesses do.

Clarifying the “New Tax” Controversy

Amid the applause for the ₦600 billion windfall, the reforms have sparked public debate, with some critics alleging that the Tinubu administration is piling fresh taxes on citizens already burdened by inflation and subsidy removals.

Professor Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, moved quickly to dispel the perception. He insisted that no new tax has been introduced under the administration.

“It’s not a new tax. No tax is being proposed. Some claim the president has presented tax after tax, but I challenge anyone to show us a new one,” Oyedele told reporters.

He reminded stakeholders that Tinubu had, in fact, suspended four new levies hurriedly introduced by the last administration, including excise duties on plastics and automobiles. Oyedele also clarified that controversial measures such as the Cybersecurity Levy predate the current government and are only being implemented within the legal framework that already existed.

2026: A Tax Overhaul on the Horizon

While the ₦600 billion VAT gain is a significant win, officials say it is just the beginning. From January 2026, Nigeria will roll out a broad package of reforms designed to simplify and modernize its tax system.

Currently, Nigeria’s tax-to-GDP ratio is 10.8%, far below Africa’s average of 16% and the global benchmark of 30%. This imbalance, experts argue, has made the country overly reliant on oil exports for revenue, a risky strategy in today’s volatile energy market.

The upcoming reforms aim to:

• Exempt low-income earners making under ₦800,000 annually from paying personal income tax.
• Allow zero corporate tax for small businesses with annual turnover below ₦100 million.
• Consolidate Nigeria’s multiple taxes and levies into fewer, more transparent categories.
• Tie collected revenues directly to development projects, improving accountability.

Oyedele stressed that the strategy is to relieve the burden on low- and middle-income earners while demanding fairer contributions from large corporations and wealthy individuals. “We want a system that is simple, equitable, and transparent,” he said.

The Bigger Picture: Digital Taxation and Non-Oil Revenue

The ₦600 billion generated from international platforms reflects the sheer size of Nigeria’s digital economy. With more than 122 million internet users and one of the largest youth populations in Africa, the demand for online services, entertainment, advertising, e-commerce, and social media, is immense.

Until now, much of this activity escaped taxation, depriving the government of vital revenue at a time of widening budget deficits. By recognizing platforms like Facebook, Amazon, and Netflix as official VAT collectors, Nigeria has taken a decisive step towards closing revenue loopholes and aligning with global taxation standards.

Fiscal analysts say this reform could mark the start of a new revenue stream that reduces Nigeria’s overdependence on crude oil. “Digital taxation is not just about revenue,” one Lagos-based tax consultant observed. “It’s about fairness. If Nigerian companies are paying VAT, then foreign companies making billions here should also contribute.”

Building Trust Through Accountability

However, experts caution that tax compliance alone will not solve Nigeria’s fiscal woes unless revenues are transparently used for development. The government has pledged to tie taxes to visible projects, from infrastructure upgrades to social programs, to strengthen public trust.

As Oyedele put it: “We are not just trying to raise money; we are building a system where Nigerians can see where their taxes go.”

A Historic Shift

For a country long defined by oil dependency, the ₦600 billion VAT mobilised from digital giants is more than a fiscal win, it is symbolic of a new era. By bringing foreign digital players into its tax net, Nigeria is signaling its intent to modernize its economy, widen its revenue base, and secure long-term growth.

With reforms scheduled to deepen in 2026, the success of this strategy could shape how Nigeria funds its development agenda in the coming decades. For now, the government is celebrating what it calls a “historic step towards a fairer and more sustainable tax system.”