OpenAI, the company behind ChatGPT and other generative AI services, has announced that it will begin collecting a 7.5% value-added tax (VAT) on all paid subscriptions in Nigeria starting November 1, 2025. This development follows increasing regulatory pressure from Nigerian tax authorities on foreign digital service providers to comply with local tax laws.
The announcement was communicated via email to Nigerian users, where OpenAI stated that the move is in line with Section 10 of Nigeria’s Value Added Tax Act (Laws of the Federation, 2004, as amended) and FIRS Information Circular 2021/19. According to the company, the 7.5% VAT will apply to all paid products, including ChatGPT Plus and any other subscription-based services it offers within the country.
In the communication, OpenAI advised subscribers who possess a valid Tax Identification Number (TIN) to add it to their account settings to ensure accurate tax documentation and compliance. The inclusion of the TIN may also be used to determine potential exemptions or for accurate record-keeping by the Federal Inland Revenue Service (FIRS).
This development places OpenAI among a growing list of global digital service providers adjusting their pricing structures to comply with Nigeria’s tax mandates. In 2022, Google notified users in Nigeria of a similar VAT charge, and companies such as Netflix, Amazon, and Meta (Facebook) have since followed suit.
These implementations are driven by amendments to the VAT Act, which now require non-resident digital firms to directly collect VAT from Nigerian users and remit the funds to the FIRS. The regulation reflects the Nigerian government’s broader effort to improve tax compliance and boost public revenue by expanding its tax net to include the digital economy.
Recent reports indicate that Nigeria has already generated over ₦600 billion in VAT from foreign digital companies, underscoring the effectiveness of these regulatory measures.
The change comes amid rising adoption of artificial intelligence tools across Africa, with Nigeria at the forefront of digital transformation on the continent. As platforms like ChatGPT become essential for developers, businesses, and creatives, the inclusion of VAT is expected to impact cost considerations for individual users and enterprise clients alike.
OpenAI’s compliance also highlights a shift in the operational landscape for tech companies operating across borders, where fiscal responsibility is no longer optional, but a core aspect of market participation.
