Callers to Pay More as FG Pushes for 12.5% Telecom Tax in New Bill
The Federal Government of Nigeria is planning to impose a significant increase in the consumption tax on telecommunications services, raising the rate from 7.5% to 12.5%. This development, detailed in a new tax reform bill, is expected to hit consumers directly, leading to higher costs for phone calls and other telecom services.
Titled ‘A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions, and Instruments, and Related Matters,’ the proposed legislation introduces excise duties not only on telecoms but also on gaming, gambling, lotteries, and betting services.
This increase is part of a broader tax reform aimed at unifying Nigeria’s fiscal framework. However, industry players are already raising concerns about the negative impact on both consumers and the telecom sector. Adeolu Ogunbanjo, president of the National Association of Telecoms Subscribers, voiced his concerns, stating, “This tax is going to hurt the telecom industry and subscribers alike. They are essentially trying to kill the industry by imposing more burdens on it.”
Telecom operators, who are currently subject to over 50 different taxes, have indicated that the cost will inevitably be passed on to consumers. Many fear that this additional financial strain will stifle growth in the industry and make communication less affordable for the average Nigerian.
This proposed tax hike follows a contentious period during which the government suspended a five percent excise duty on telecom services in 2023. Now, with this reintroduction, the debate over telecom taxation is expected to intensify once again, as industry players and consumers alike brace for the effects of the new fiscal policies.
