Nigeria's New Digital Tax: What Founders Need to Know

The Nigerian government has officially rolled out the much-debated Digital Services Tax (DST), aiming to capture revenue from multinational tech giants and local SaaS platforms alike.

Effective immediately, any digital service provider generating over ₦25 million annually from Nigerian users will be subject to a 6% tax on gross turnover.

The Impact on Margins

For foreign giants like Meta and Netflix, this is a standard cost of doing business globally. However, for local B2B SaaS startups operating on razor-thin margins, a 6% tax on revenue rather than profit could be devastating.

Founders are already scrambling to adjust their pricing models. “We simply have to pass this cost down to the consumer,” noted one prominent Lagos-based founder. “Our unit economics do not allow us to absorb a 6% top-line hit.”

Compliance Architecture

The Federal Inland Revenue Service (FIRS) has mandated the use of a new API integration for real-time transaction reporting. Startups have a 90-day grace period to integrate this compliance layer into their payment gateways, failing which they face severe operational sanctions.