(Ecofin Agency) - The 2020 finance law in Nigeria mandates a 5% excise tax on telecom services. It aimed at generating approximately $195 million for the government.
President Bola Ahmed Tinubu of Nigeria ordered the suspension of the 5% excise tax on telecommunications services in the country, along with other taxes. Dele Alake, the President’s special advisor for special tasks, communication, and strategy, announced during a press conference in Abuja on July 6.
The 5% excise tax was implemented in May by the government under former President Muhammadu Buhari. However, just a month later, the Minister of Communications and Digital Economy, Isa Ali Ibrahim Pantami, declared its permanent removal. The tax was part of the 2020 finance law, which was introduced to boost revenue due to declining oil and gas earnings. Although the initiative was announced in July 2022, its implementation was suspended in September of the same year.
This new levy added to the numerous taxes, fees, and levies imposed on the Nigerian telecoms sector. It was expected to generate 150 billion nairas ($195.1 million) for the government.
By suspending the telecoms services tax, President Tinubu aims to prioritize the welfare of Nigerians in government policies. He also intends to tackle burdensome fiscal measures for businesses and curb the proliferation of taxes. This aligns with the commitment he made during his inauguration last May.
Isaac K. Kassouwi