OpenAI has announced that it will begin collecting a 7.5% value-added tax (VAT) on its services in Nigeria, effective November 1, 2025. This new charge, communicated to users via email, is in compliance 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. The 7.5% VAT will be applied to all paid subscriptions, including ChatGPT Plus, as well as any other OpenAI services billed in Nigeria. OpenAI has advised users to include a valid Tax Identification Number (TIN) in the payment section of their account to ensure proper tax documentation.

This move by OpenAI is part of a broader trend as Nigeria continues to strengthen its tax compliance framework for foreign digital service providers operating within the country. Other major technology companies, such as Google, had already announced in 2022 their plans to charge Nigerians VAT on their products. Furthermore, companies like Netflix, Facebook, and Amazon have reportedly implemented similar VAT policies for their Nigerian users, with recent reports indicating that Nigeria has generated approximately ₦600 billion in VAT from these companies.

While directives for foreign companies to collect VAT are not entirely new, recent amendments to the VAT Act now specifically mandate non-resident digital firms to directly collect VAT from Nigerian users and remit these funds to the Federal Inland Revenue Service (FIRS). Despite these changes, officials maintain that no new taxes have been introduced under President Tinubu's administration. Instead, the focus is on restructuring existing tax policies, consolidating various levies, and enhancing overall compliance. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy & Tax Reforms, has challenged anyone to identify a newly added tax.

OpenAI's compliance further signifies the increasing integration of global tech firms into Nigeria's digital tax system. This development presents both advantages and disadvantages for the country. On one hand, it enables Nigeria to generate significant income from international companies providing services to its citizens. On the other hand, it means that users and businesses relying on these services will face increased costs. For instance, ChatGPT Plus users, who currently pay around ₦31,500 ($20) per month, will see their monthly payment rise to approximately ₦33,862.50 ($22.43) with the inclusion of the 7.5% VAT. This price increase could also impact Nigerian AI startups, such as Decide and ChatATP, which depend on OpenAI's foundational infrastructure.

In an effort to mitigate the effect of this price hike on Nigerian consumers, OpenAI has strategically introduced a cheaper subscription tier for Nigerians, priced at ₦7,000 per month. This initiative aims to cushion the financial impact and make its services more accessible despite the new tax obligations.