Nigerian users of ChatGPT are set to pay more for OpenAI’s popular artificial intelligence tool as the company implements a 7.5% Value Added Tax (VAT) in line with Nigerian tax regulations. The new pricing adjustment reflects OpenAI’s compliance with the country’s digital service tax policy, which requires foreign companies offering digital products and services to charge VAT on subscriptions and transactions involving Nigerian customers.
The development means that ChatGPT Plus subscribers in Nigeria will now pay more than the previous $20 monthly fee. With the inclusion of the 7.5% VAT, the total cost rises to approximately $21.50 per month. The adjustment, though modest, marks another instance of rising digital service costs in Nigeria, as several global tech firms have recently updated their pricing structures to include local taxes.
Nigeria’s VAT on digital services was introduced by the Federal Inland Revenue Service (FIRS) in 2020 under the Finance Act, which expanded the tax net to include non-resident digital service providers. The law mandates companies like OpenAI, Netflix, Google, and Meta to collect VAT from Nigerian users and remit it to the government. The move is part of broader efforts by the government to increase revenue from the fast-growing digital economy.
For OpenAI, the VAT implementation aligns with its global compliance strategy as it expands access to its AI tools in multiple regions. The company began offering paid subscriptions, including ChatGPT Plus, in over 150 countries and territories earlier this year. The plan provides users with faster response times and access to advanced models such as GPT-4, making it a preferred option for professionals, researchers, and businesses.
However, the price increase may affect affordability for many Nigerian users already grappling with rising internet costs and currency depreciation. With the naira’s continued fluctuation against the dollar, digital subscriptions denominated in foreign currencies have become more expensive for local consumers.
Despite this, industry observers believe that the demand for AI-powered tools like ChatGPT will remain strong due to their growing importance in education, business, and content creation. As OpenAI formalizes its tax obligations in Nigeria, the move could also encourage greater regulatory engagement between global tech firms and local authorities in shaping the country’s digital economy.
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