Starting November 1, 2025, OpenAI will implement a 7.5% value-added tax (VAT) on its services for users in Nigeria.
According to a notification sent via email, this adjustment aligns with Section 10 of Nigeria’s Value Added Tax Act, Laws of the Federation 2004 (as amended), as well as the Federal Inland Revenue Service (FIRS) Information Circular 2021/19.
This VAT rate will be applied to all paid OpenAI offerings, including ChatGPT Plus subscriptions and any other services billed within Nigeria.
Users possessing a valid Tax Identification Number (TIN) are encouraged to enter it in their OpenAI account’s payment section to facilitate accurate tax reporting.
This development reflects Nigeria’s ongoing efforts to enhance tax compliance among international digital service providers operating in the country.
For context, major companies such as Google began charging Nigerian customers VAT as early as 2022, following similar regulatory requirements.
Moreover, platforms like Netflix, Facebook, and Amazon have already adopted comparable VAT collection practices for Nigerian users, contributing to Nigeria’s reported ₦600 billion VAT revenue from these digital services.
While VAT obligations for foreign firms are not a novel concept, recent amendments to the VAT Act now mandate that non-resident digital companies directly collect VAT from Nigerian consumers and remit it to the FIRS.
Government officials emphasize that no new taxes have been introduced under President Tinubu’s administration. Instead, the focus remains on refining existing tax structures, consolidating various levies, and ensuring stricter enforcement. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy & Tax Reforms, stated, “I challenge anyone to identify a newly imposed tax.”
OpenAI’s adherence to these regulations highlights the increasing integration of global technology firms into Nigeria’s digital taxation framework-a trend with both advantages and challenges for the nation.
While this policy enables Nigeria to generate revenue from international companies providing services to its citizens, it also means that end-users and businesses utilizing these platforms will face higher costs.
For example, the current ChatGPT Plus subscription costs ₦31,500 (approximately $20) monthly; with the 7.5% VAT included, the price will rise to ₦33,862.50 (around $22.43).
This increase could impact AI startups such as Decide and ChatATP, which rely on OpenAI’s infrastructure to build their products and services.
In an effort to mitigate the financial burden on Nigerian users, OpenAI recently introduced a more affordable subscription tier priced at ₦7,000 per month.