OpenAI, which operates the generative artificial intelligence service ChatGPT, will begin collecting 7.5 per cent Value-Added Tax (VAT) on its services in Nigeria starting on November 1, 2025.
This was disclosed by the company in an email sent to users, noting the new charge complies with Section 10 of the Value Added Tax Act, Laws of the Federation of Nigeria 2004 (as amended) and the FIRS Information Circular 2021/19.
This means that the 7.5 per cent levy will apply to all paid subscriptions, including ChatGPT Plus and any other OpenAI services billed in Nigeria.
The company advised users with a valid Tax Identification Number (TIN) to include it in the payment section of their OpenAI account to ensure proper tax documentation.
This is the latest development as Nigeria seeks to tighten tax compliance for foreign digital service providers operating in the country.
Earlier this year, President Bola Tinubu signed a series of tax bills into law. These acts will help harmonise taxation in the country and help improve the country’s tax to gross domestic product (GDP) ratio.
Already, technology companies operating in Nigeria like Google, Netflix, Facebook, and Amazon among others already charge Nigerians VAT on their products. Newly operational services offerings like OpenAI will come into the fold.
Amendments in the VAT act now compel non-resident digital firms to collect the levy directly from Nigerian users and remit it to the Federal Inland Revenue Services (FIRS).
Speaking earlier this month during a session at the 31st Nigerian Economic Summit (NES#31) in Abuja, the Chairman of the Presidential Committee on Fiscal Policy & Tax Reforms, Mr Taiwo Oyedele, said the country’s tax reforms will help reduce risks for companies getting value from Nigerians.
“The tax reforms are not to impose higher taxes. You won’t find that anywhere in the laws. Rather, they are to reduce business risk. I can give you examples. We have companies in Nigeria that are being asked to pay minimum tax on their capital. So the idea is to reduce business risk and make the environment simpler.”
As a result, the compliance by OpenAI indicates the growing integration of global tech firms into Nigeria’s digital tax system.
The compliance, however, translates to increase in payment of these services for Nigerians. For instance, people who use premium ChatGPT services will have to pay more. Currently, ChatGPT Plus users pay N31,500 per month, the inclusion of a 7.5 per cent VAT means they will now pay N33,862.50 monthly.
To cushion this, OpenAI has opened a cheaper subscription tier of N7,000 a month to Nigerians, with limited capabilities.
Business Post gathered that other AI services will also be affected by the VAT compliance.