Nigeria abandons new duty on telecoms

Nigeria abandons new duty on telecoms

The Nigerian government has confirmed that it will not impose the 5% excise duty on Nigeria’s telecoms sector that was originally introduced in August 2022 but delayed soon afterwards.

The government announced that this was in line with the recommendations of a committee, the Presidential Review Committee on Excise Duty in the Digital Economy Sector, which was constituted to review the implementation of excise duty in the telecom sector.

The proposed excise taxes would have raised the total taxes and levies on telecoms services to 12.5% from an existing 7.5%.

The Minister of Communications and Digital Economy, Isa Pantami, first argued against the tax last September. He suggested it would increase the cost of telecommunication services, make many Nigerians worse off and widen the gap in telecoms access in the country. 

According to Nigeria’s Premium Times news service, Pantami had also said his ministry was not consulted and criticised the timing of the plan.

The federal government suspended the proposed new tax soon after Pantami’s intervention. He then chaired the review committee, which submitted a report to the president, explaining why the sector should be exempted. Among its other findings, it underlined the importance of the sector to the growth of the Nigerian economy and  pointed out that operators in the telecoms sector already pay around 41 different categories of taxes, levies and charges.

There had, however, been indications that the government might be considering the implementation of the excise duty this year. To counter this, consumers, through the National Association of Telecoms Subscribers, sued the federal government in court and, according to the Economic Confidential news service, plan to continue with the case in court until the government backs up its action with law.

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