‎OpenAI Implements 7.5% VAT On Subscriptions For Nigerian Users Starting November 2025

Effective November 1, 2025, Nigerian users of ChatGPT will face increased subscription costs as OpenAI enforces a 7.5% Value-Added Tax (VAT) on all paid services to comply with Nigerian tax regulations. The monthly fee for ChatGPT Plus will rise from N31,500 ($20) to approximately N33,862.50 ($22.43).

‎This decision was communicated to users via an email from OpenAI, highlighting compliance with Section 10 of the Value Added Tax Act, Laws of the Federation of Nigeria 2004 (as amended), as well as the Federal Inland Revenue Service (FIRS) Information Circular 2021/19. Users are now required to input their Tax Identification Number (TIN) in their payment settings to facilitate accurate tax reporting.

‎The implementation of VAT aligns OpenAI with other major global technology firms, including Google, Netflix, Amazon, and Meta, which have already begun applying VAT on digital services for Nigerian customers. This shift is part of a broader effort by the Nigerian government to broaden the tax base and enhance revenue generation from foreign digital service providers; recent data indicates billions have been collected in VAT from these companies.

‎Under Nigeria’s revised VAT framework, non-resident digital firms providing services to local users are mandated to collect and remit VAT directly to the FIRS. Officials emphasize that this policy does not introduce new taxes but serves to bolster compliance and expand the tax framework.

‎Notably, in December of the previous year, the National Information Technology Development Agency (NITDA) reported that foreign digital companies operating within Nigeria, including Google, Microsoft, and TikTok, contributed a total of N2.55 trillion in taxes during the first half of 2024. Furthermore, in September of this year, Mr. Mathew Osanekwu, Special Adviser on Tax Policy to the Chairman of the Tax Reforms Committee, highlighted that Nigeria collected over N600 billion in VAT from global digital service providers such as Facebook, Amazon, and Netflix.

‎Osanekwu reiterated that amendments to the VAT Act empower the FIRS to bring non-resident companies into the tax system, ensuring they comply with local requirements as agents of collection. This approach not only aligns with global best practices but also guarantees that Nigeria receives its due revenue from services consumed domestically, regardless of their foreign origin.

‎While this policy strengthens government revenue streams, it is expected to raise operational costs for Nigerian subscribers and startups dependent on OpenAI’s tools, potentially impacting the local AI and tech landscape.