Glovo's Nigeria boom raises tax questions no one is asking
Glovo says Nigeria is its fastest-growing market. The claim came at its Future of Commerce summit in 2026. I'm not here to celebrate the growth. I'm here to ask what happens when the taxman comes knocking.
On-demand delivery platforms like Glovo operate in a regulatory grey zone. They connect buyers, sellers, and riders. Who collects VAT? Who remits it? The official answer is the merchant. The real answer is nobody knows for sure.
The tax gap that keeps FIRS awake
Nigeria's Federal Inland Revenue Service (FIRS) has been chasing digital economy tax compliance for years. The 2021 Finance Act tried to capture non-resident digital services. But enforcement on local platforms is patchy. Glovo's merchants are mostly small businesses, restaurants, grocery stores, pharmacies. Many operate informally. They may not even have a VAT registration number.
FIRS doesn't have the capacity to audit thousands of micro-merchants. The risk is a compliance cost spiral: platforms get pressured to collect and remit on behalf of merchants, pushing costs onto sellers who already struggle with thin margins.
Amnesty programs don't fix structural problems
Nigeria has run multiple tax amnesty programs, the Voluntary Assets and Income Declaration Scheme (VAIDS), the Offshore Program. Each brought temporary revenue but didn't solve the underlying issue: a fragmented informal sector that resists formalization. Delivery platforms are now part of that fragmentation.
Glovo's growth means more transactions outside the formal reporting system. FIRS will eventually notice. Expect audits. Expect demands for back taxes. Companies that plan for this now will fare better than those that treat compliance as an afterthought.
What investors should watch
Glovo's Nigeria story is a growth story. But growth without tax infrastructure creates contingent liabilities. Three things matter:
- FIRS's enforcement capacity. If the agency gets better data-sharing agreements with banks and payment gateways, platforms become visible targets.
- VAT rate stability. Nigeria's VAT rate has increased from 5% to 7.5% over recent years, and another hike is plausible given fiscal pressure. That directly hits platform economics.
- The cost of compliance automation. Glovo can build tax tools into its app. That is an investment. Small competitors cannot.
Glovo should not assume its growth is protected. Nigeria's tax net is tightening. The question is not whether FIRS will act, it's when.