ChatGPT to Cost More in Nigeria as OpenAI Implements 7.5% VAT
Nigerian users of OpenAI’s advanced AI services, including the popular ChatGPT Plus subscription, are set to face increased costs as the company announced the addition of a 7.5% Value Added Tax (VAT) to its charges. This new levy will take effect from November 1, 2025, impacting all paid OpenAI services billed within Nigeria. The move reflects a broader trend of foreign digital service providers aligning with local tax regulations, a development that will undoubtedly resonate across Nigeria’s burgeoning digital economy and beyond, within the wider African tech landscape.
The Broader Context: Nigeria’s Push for Digital Tax Compliance
OpenAI’s decision to apply VAT is a direct response to Nigeria’s ongoing efforts to ensure tax compliance from international digital platforms operating within its borders. The company clarified in communications to its users that this charge is mandated by Section 10 of the Value Added Tax Act, Laws of the Federation of Nigeria 2004 (as amended), alongside the specific guidelines outlined in the FIRS Information Circular 2021/19. This means that all premium subscriptions, such as ChatGPT Plus, and other professional OpenAI services will now incorporate this additional 7.5% VAT. To facilitate proper tax documentation, OpenAI has also advised users with a valid Tax Identification Number (TIN) to update their payment profiles accordingly. This development is not isolated; it’s part of a concerted push by the Nigerian government to capture revenue from the rapidly expanding digital sector. Leading global tech giants have already embarked on similar paths. Google, for instance, announced its intention to charge VAT on its products for Nigerian users back in 2022. Similarly, other prominent platforms like Netflix, Facebook, and Amazon have already integrated comparable VAT policies for their Nigerian customer base, signaling a consistent regulatory environment that multinational digital service providers must now navigate.
This impending price adjustment by OpenAI underscores the evolving landscape of digital taxation in Nigeria, a key market in Africa’s tech ecosystem. While the additional cost might be a point of consideration for consumers and businesses leveraging AI for innovation and productivity, it also highlights the nation’s steadfast commitment to ensuring equitable tax contributions from all entities profiting within its digital borders.
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