Nigerian users of ChatGPT will see higher subscription costs starting November 1, 2025, when OpenAI starts applying a 7.5% value-added tax (VAT) to all of its paid services in accordance with Nigerian tax regulations.
ChatGPT Plus and all other billable OpenAI products and services are among the paid subscriptions and will be subject to the increased fee, which would raise the monthly subscription cost from $20 (N31,500) to roughly $22.43 (N33,862.50).
The new charge conforms with Federal Inland Revenue Service (FIRS) Information Circular 2021/19, Laws of the Federation of Nigeria 2004 (as amended), and Section 10 of the Value Added Tax Act, according to an email sent by OpenAI to users and customers by the corporation.
Nigeria’s increased attempts to control tax compliance among international digital service providers are reflected in the company’s advice to clients to add a legitimate Tax Identification Number (TIN) in their account payment settings in order to assist relevant tax documentation.
As subscription now requires a TIN, and to guarantee accurate tax paperwork, the business suggested that users provide their Tax Identification Number (TIN) in their payment preferences.
By making this change, OpenAI joins other multinational digital platforms and internet titans like Google, Netflix, Amazon, and Meta that have already started charging VAT to Nigerian consumers for digital services. Nigeria has earned billions of dollars in VAT from these international service providers, according to recent reports. Nigeria reportedly collected up to N600 billion in VAT from these businesses, according to recent reports.
OpenAI contributes to Nigeria’s growing digital tax ecosystem by adhering to its VAT regulations.
The regulation does, however, result in higher fees for Nigerian subscribers and startups that use OpenAI’s tools, which might raise operating costs throughout the local AI and tech scene even while it helps the government generate cash.
Non-resident digital businesses providing services to local users are required to collect VAT and send it straight to the FIRS under Nigeria’s revised VAT regime.
Officials have argued that this policy increases compliance and expands the revenue base rather than imposing new taxes.
In an effort to somewhat offset the price increase, OpenAI has also launched a more affordable subscription tier for Nigerians, priced at N7,000 per month. Due to the possibility of increased operating costs for businesses based on OpenAI infrastructure (like Decide and ChatATP), this price rise is probably going to have an impact on the local AI sector.
Things eeryone should be aware of is that Google, Microsoft, TikTok, and other international digital enterprises operating in the nation paid a total of N2.55 trillion in taxes in the first half of 2024, according to a report released by the National Information Technology Development Agency (NITDA) last December.
The Chairman of the Tax Reforms Committee’s Special Adviser on Tax Policy, Mr. Mathew Osanekwu, also disclosed in September of this year that Nigeria has successfully collected more than N600 billion in Value Added Tax from international digital service providers including Facebook, Amazon, and Netflix.
The Federal Inland Revenue Service was able to include non-resident businesses providing services in Nigeria in the tax system because to changes made to the VAT Act, he noted.
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