Telcos Express Concern Over Possible 5 Percent Excise Tax Return

There is palpable fear that Nigeria may bring back a 5per cent excise tax on telecom services, following the 2024 Finance Bill passed by the Senate last week.

The tax would apply to data transmission and voice calls was first introduced in 2020 under the Mohammadu Buhari administration to widen the tax base, but the measure was suspended in 2023 by President Bola Tinubu due to rising inflation.

It was gathered that with the budget under pressure, the government is now considering reinstating it.

Telecom operators warn that the tax would raise service costs and make it harder to close Nigeria’s digital divide, which still leaves more than 40% of the population without internet access.

Engr. Gbenga Adebayo, chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), said the proposal lacks detail and would increase the financial burden on users.

“We’ve had no clarity on how the 5% tax would be implemented, but the burden will fall on the consumer.  Telecoms should be treated as a social good, not taxed like luxury items. No one taxes telecoms like this in countries where infrastructure is taken seriously,” he said.

ALTON Chairman also noted that operators are already subject to 54 different taxes nationwide.

Meanwhile, the Nigerian Communications Commission (NCC) has not yet received the official version of the bill for review and comment.