The Nigerian Federal Government is considering imposing a 5% excise duty on telecommunications services provided in the country, including calls, SMS and data services. Zainab Ahmed, Minister of Finance and National Planning, made the disclosure at a stakeholder forum organized by the Nigerian Communications Commission (NCC) in Abuja.
The new tax will be collected from cell phone subscribers and remitted to Nigerian customs, with payments made on a monthly basis, by the 21st of each month. The new tax is included in the 2020 budget law. Since the federal government approved it in May, it has been steadily debated over its implementation. It is the government's desire to increase overall revenue at a time when oil and gas revenues are declining. Once implemented, the new tax is expected to raise at least 150 billion naira (US$361 million) for the federal government.
The new tax has been opposed by telecom operators who have described it as unpopular, provocative, strange, insensitive and irresponsible. Indeed, it comes on top of the 39 taxes already paid by telecom operators in Nigeria. When operators proposed a 40 % increase in call charges in May in response to rising operating costs, the federal government was adamantly opposed. For subscribers, the new 5% tax will be added to the 7.5% value-added tax (VAT) paid to the federal government, making a total of 12.5%.
