Nigeria: Suspension of the proposed telecommunication tax in Nigeria

The Federal Government of Nigeria has been commended for suspending the proposed excise duty on telecommunication services at a time when the purchasing power of the citizens is being eroded by inflation and other negative economic indices.

The suspension was announced by the Minister of Communications and Digital Economy, Professor Isa Pantami, earlier in September 2022 during the inaugural meeting of the Presidential Committee on Excise Duty for the Digital Economy Sector in Abuja, Nigeria.

According to the Minister of Communication, the telecommunication sector is already overburdened by excessive and multiple taxation.

Notably, the contributions of ICT to the economy pushed the overall contributions of the non-oil sector to grow by 4.77 per cent in real terms, resulting in a 93.67 per cent contribution to the nation’s gross domestic product in the second quarter of 2022.

Prior to this, the Federal Government had through the Budget Office of the Federation revealed that it will commence the implementation of the proposed excise duties on telecommunication services and food and beverages sector in 2023.

It would be recalled that the Federal Government of Nigeria had announced excise duties at 5% on telecommunication services in Nigeria as part of the 2022 Fiscal Policy Measures and Tariffs Amendments Order (“the Order”).

Telecom operators under the aegis of the Association of Licensed Telecom Operators in Nigeria, ALTON had kicked against the proposed tax, lamenting that it will whittle the growth of telecom penetration and put unnecessary pressure on subscribers’ ability to use telecom services.

The suspension of the proposed telecom tax is being seen as a victory for telecom subscribers who would have borne the brunt of the tax.