Starting November 1, 2025, ChatGPT users in Nigeria will pay higher subscription fees as OpenAI begins implementing a 7.5% Value Added Tax (VAT) on all its paid services, in compliance with Nigerian tax laws.
The new VAT charge will apply to all billable OpenAI products, including ChatGPT Plus, increasing the monthly subscription cost from ₦31,500 ($20) to approximately ₦33,862.50 ($22.43).
OpenAI announced the change in an email to users, explaining that it is acting in accordance with Section 10 of the Value Added Tax Act (Laws of the Federation of Nigeria 2004, as amended) and the Federal Inland Revenue Service (FIRS) Information Circular 2021/19.
The company also advised Nigerian users to add their Tax Identification Number (TIN) to their payment settings to ensure accurate tax documentation and compliance.
This move aligns OpenAI with other major global technology companies such as Google, Netflix, Amazon, and Meta, which already charge Nigerian users VAT on digital services. These firms have collectively generated billions of naira in VAT revenue for the Nigerian government in recent years.
While the new tax policy enhances compliance and supports government revenue generation, it also means increased costs for local users and startups that rely on OpenAI’s tools, potentially raising operational expenses within Nigeria’s fast-growing AI and tech ecosystem.
Under Nigeria’s updated VAT framework, foreign digital companies providing services to local users are required to collect VAT and remit it directly to the FIRS. Government officials have clarified that the policy does not introduce new taxes but rather strengthens enforcement and broadens the country’s tax base.
Last December, the National Information Technology Development Agency (NITDA) disclosed that foreign digital companies operating in Nigeria—including Google, Microsoft, and TikTok—remitted a total of ₦2.55 trillion in taxes in the first half of 2024.
Likewise, in September 2025, Mr. Mathew Osanekwu, Special Adviser on Tax Policy to the Chairman of the Tax Reforms Committee, revealed that Nigeria had collected over ₦600 billion in VAT from global digital service providers such as Facebook, Amazon, and Netflix.
He explained that amendments to the VAT Act have empowered the Federal Inland Revenue Service (FIRS) to bring non-resident digital service providers into the tax net, ensuring Nigeria benefits from taxes on services consumed locally but delivered by foreign firms.
“These are not Nigerian entities, but they are now paying VAT under Section 10 of the VAT Act. They are registered in Nigeria and appointed as agents of collection,” Osanekwu said during a media workshop in Abuja.
He added that the move aligns with global best practices and reinforces Nigeria’s position in the evolving digital tax landscape.
