The Special Adviser on Tax Policy to the Chairman of the Tax Reforms Committee, Mr Mathew Osanekwu, has revealed that Nigeria has successfully collected over N600bn in Value Added Tax from global digital service providers such as Facebook, Amazon, and Netflix.

He explained that amendments to the VAT Act had empowered the Federal Inland Revenue Service to bring non-resident companies offering services in Nigeria into the tax net. “These are not Nigerian entities, but they are now paying VAT under Section 10 of the VAT Act. They are registered in Nigeria and are also appointed as agents of collection,” Osanekwu stated during a workshop for media practitioners in Abuja on Wednesday.

He stressed that the move aligns with global best practices and ensures Nigeria benefits from taxes on services consumed locally but delivered by foreign companies.

Also at the event, the Federal Government clarified that President Bola Tinubu’s ongoing fiscal and tax reforms have not introduced any new taxes, contrary to widespread speculation.

Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Professor Taiwo Oyedele, explained that the reforms were designed to ease the tax burden on low- and middle-income earners while ensuring equity and fairness.

According to him, many of the levies being debated in the public space, including the controversial five per cent fuel surcharge, are not new but provisions in long-standing laws predating the current administration.

“It’s not a new tax. Some said the tax is being proposed. The tax is not being proposed. Some believe this president has introduced tax after tax, and I challenge them to point to one newly introduced tax,” Oyedele said.

He reminded participants that in July 2023, barely two months after assuming office, President Tinubu signed four executive orders suspending taxes that had been hurriedly introduced during the final days of the previous administration. These included excise duties on plastic items and vehicle importation.

“Many of us are not even aware because this president did not allow those taxes to take effect. They were suspended and eventually removed,” Oyedele added. He further clarified that the much-debated Cybersecurity Levy was enacted years ago, stressing that Tinubu’s administration did not originate it.

The tax reforms, which take effect in January 2026, are part of efforts to overhaul Nigeria’s weak tax system, broaden the revenue base, and improve compliance. Nigeria’s tax-to-GDP ratio currently stands at about 10.8 per cent, one of the lowest globally and far below the African average of 16 per cent and the global benchmark of 30 per cent.

Oyedele emphasised that the reforms aim to consolidate multiple taxes, remove overlapping charges, and tie levies to transparent, project-linked spending. He stressed that the framework is progressive, protecting vulnerable groups while fairly taxing higher earners.

Under the reforms, personal income tax thresholds have been adjusted to ensure that Nigerians earning less than ?800,000 annually will pay no tax on that amount. Similarly, small businesses earning under ?100m per year will enjoy a 0 per cent corporate tax rate.

“This reform is the most progressive Nigeria has ever seen. It eliminates taxes on the poor, reduces the burden on the middle class, and targets higher-income earners fairly,” Oyedele noted.

He also painted a sobering picture of Nigeria’s economic state as of May 2023, describing it as “on the verge of collapse.”

According to him, the country’s foreign reserves were heavily encumbered by unpaid forward contracts and subsidy-induced debt by the Nigerian National Petroleum Company Limited (NNPCL). With barely 200,000 barrels of free crude available due to pre-sales, Nigeria’s fiscal system was “running on fumes.”

He argued that continuing to finance fuel subsidies with borrowed money secured against future crude production would have led to a total shutdown of fuel imports, similar to the crisis in Sri Lanka.

“People may ask whether life is better now than it was two years ago. The right question is: would life have been better today if those reforms hadn’t happened?” Oyedele asked. (PUNCH)