The Federal Government has unveiled plans to reintroduce excise duty on telecommunications services.
This is part of a broader tax reform initiative that seeks to increase the consumption tax on telecom services to 12.5 percent from the current 7.5 percent value added tax (VAT).
The proposed tax hike is detailed in a new bill titled: A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions, and Instruments, and Related Matters.
Under the new bill, excise duties will be imposed on various services, including telecommunications, gaming, gambling, lotteries, and betting.
“Services, including telecommunications, gaming, gambling, betting, and lotteries, however described, provided in Nigeria shall be charged with duties of excise at the rates specified under the Tenth Schedule to this Act in a manner as may be prescribed by the Service,” the bill stated.
The telecom industry has expressed concerns over the impact of the proposed tax on consumers and service providers. Mr. Adeolu Ogunbanjo, president of the National Association of Telecoms Subscribers (NATCOMS), voiced his displeasure, warning that the tax would stifle the industry.
“This tax is going to hurt the telecom industry and subscribers alike. They are essentially trying to kill the industry by imposing more burdens on it,” Mr. Ogunbanjo said.
This proposal follows the controversial five percent excise duty on telecom services introduced in 2022, which was later suspended in 2023 by an executive order. Telecom operators had warned that such taxes would be passed on to consumers, further increasing the cost of telecommunication services in Nigeria.
