Nigeria Scraps Controversial 5% Telecoms Tax to Ease Financial Pressures
In a move aimed at alleviating financial burdens on consumers and businesses in Nigeria’s digital economy, President Bola Tinubu has permanently abolished the 5% excise duty on telecommunications services. This decision was announced by Aminu Maida, Executive Vice-Chairman of the Nigerian Communications Commission (NCC), during a media briefing in Abuja.
Maida confirmed that the excise levy, initially suspended in 2023, has now been officially removed under revised national tax laws. “The 5% excise duty is no longer in effect,” Maida stated, emphasizing that the President’s directive was firmly opposed to placing such a burden on Nigerians. Maida expressed satisfaction that this decision was upheld in the new legislation.
The duty, which applied to mobile voice and data services, had sparked significant backlash from industry stakeholders and consumer advocacy groups. Critics argued that the tax would increase the cost of digital access and threaten the viability of telecom operators already grappling with high operational costs.
President Tinubu initially suspended the tax in July 2023 as part of a broader fiscal policy overhaul aimed at mitigating the impact of multiple tax burdens on businesses and households. However, the issue resurfaced in October 2024, when the National Assembly proposed reinstating the tax as part of revenue-generating measures that included levies on gaming, betting, and lottery services.
The proposal was met with strong resistance from the telecom sector. The Association of Telecommunications Companies of Nigeria (ATCON) argued that reinstating the excise duty would undermine service affordability and hinder sectoral growth, particularly at a time when reliable internet access is increasingly vital to Nigeria’s economy.
By scrapping the tax, the Nigerian government aims to support the growth of its digital economy and alleviate financial pressures on consumers and businesses. This decision underscores the importance of balancing tax policies with the need to promote economic growth and development in the rapidly evolving digital landscape.
