By Olakunle Oke
Artificial intelligence company OpenAI has announced that it will begin collecting 7.5 percent Value Added Tax (VAT) on its services in Nigeria starting November 1, 2025, in compliance with federal tax regulations.
The company said the new charge aligns with Section 10 of the Value Added Tax Act (as amended) and the Federal Inland Revenue Service (FIRS) Information Circular 2021/19, which mandates non-resident digital companies to collect and remit VAT on services rendered to Nigerian users.
The tax will apply to all paid subscriptions, including ChatGPT Plus and other OpenAI services billed in Nigeria. The company advised users with valid Tax Identification Numbers (TINs) to include them in their payment details to ensure proper tax documentation and compliance.
The move is part of Nigeria’s broader effort to tighten tax compliance among foreign digital service providers operating within its jurisdiction. Global tech companies such as Google, Netflix, Facebook, and Amazon have already implemented similar VAT charges on Nigerian users.
According to recent government data, Nigeria generated over ₦600 billion in VAT revenue from such international digital platforms.
Officials have maintained that the policy does not introduce any new taxes but rather ensures enforcement of existing ones. The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, clarified that the administration of President Bola Tinubu is focused on restructuring and consolidating existing tax frameworks rather than introducing new levies.
The VAT introduction means that Nigerian users of ChatGPT Plus, currently paying ₦31,500 ($20) per month, will now pay approximately ₦33,862.50 ($22.43) after the 7.5 percent VAT is applied.
However, in a move to cushion the impact, OpenAI has introduced a cheaper subscription tier for Nigerian users, priced at about ₦7,000 per month, providing a more affordable option amid rising digital service costs.
OpenAI’s compliance signals a growing trend of foreign digital firms integrating into Nigeria’s tax system.
