Telecom subscribers in Nigeria might quickly be paying 5% extra for knowledge and voice companies if the Nigeria Tax Invoice 2024 is signed into legislation. Handed within the Senate on Might 8, 2025, the invoice reintroduces a controversial 5% excise tax on telecom companies, a transfer operators warn would in the end burden customers and stall the nation’s push for broader digital inclusion.
The 5% excise responsibility was first launched within the Finance Act of 2020 underneath former President Muhammadu Buhari. Designed to broaden the listing of products and companies topic to excise taxes, it was met with stiff resistance from telecom operators and client advocates. They warned it could increase the price of already important companies in a struggling financial system. President Tinubu suspended the tax in July 2023, citing its potential to worsen inflation and impede entry to digital companies.
Quick ahead to 2025, and the business nonetheless isn’t shopping for it. As of August 2024, telecom operators reportedly paid 54 completely different taxes, in line with the Affiliation of Licensed Telecom Operators of Nigeria (ALTON). With the sector solely simply rebounding from foreign money devaluation and rising operational prices, operators concern the reintroduction of the excise responsibility might choke restoration efforts and sluggish digital inclusion.
“We’ve had no readability on how the 5% tax can be applied, however the burden will fall on the buyer,” stated Gbenga Adebayo, President of ALTON, which represents main gamers like MTN Nigeria, Airtel Nigeria, Globacom, and 9mobile. “Telecoms must be handled as a social good, not taxed like luxurious gadgets. Nobody taxes telecoms like this in international locations the place infrastructure is taken critically.”
Business stakeholders argue that excise taxes are usually reserved for luxurious or dangerous items equivalent to designer watches, luxurious automobiles, alcohol, or tobacco, whose consumption governments would possibly need to curb. Web entry, they are saying, hardly belongs in that class.
An excise responsibility, nonetheless, is a selected sort of tax that’s levied on sure items or companies on the time of their buy. The Nigerian Tax Invoice describes excisable transactions as “transactions which occur— (a) bodily in Nigeria, the excisable transaction is the availability of the service; and (b) remotely or nearly, the excisable transaction is the receipt or consumption of the service in Nigeria.”
Meaning each home and worldwide service suppliers providing telecom companies in Nigeria can be liable to gather and remit the 5% tax, passing the fee on to the shoppers.
“There’s no wiggle room for operators to soak up this value,” stated Anthony Emoekpere, President of the Affiliation of Telecommunications Firms of Nigeria (ATCON). “Operators are already working with a tariff enhance that fell wanting what they want. The brand new tax will squeeze margins and hit customers the toughest.”
Nnenna Ukoha, Head of Public Affairs on the Nigerian Communications Fee (NCC), informed TechCabal that the regulator has not but acquired the official model of the invoice for assessment.
In the meantime, the invoice does embody some reliefs: 0% VAT on important items and companies like meals, healthcare, training, lease, public transport, and renewable power. These classes, in line with Presidential Fiscal Coverage and Tax Reforms Committee Chair Taiwo Oyedele, make up round 82% of common family consumption, and near 100% for low-income households.
Nonetheless, the telecom sector, which lately applied a 50% tariff enhance on its companies, stays uneasy. The timing of the invoice is particularly delicate, coming simply as main gamers like MTN Nigeria and Airtel Africa are bouncing again financially. MTN posted a ₦133.7 billion ($83.1 million) revenue after tax in Q1 2025, reversing a ₦392.7 billion ($244.06 million) loss in 2024. Airtel Africa reported $661 million in pre-tax revenue for the 12 months ending March 2025. These beneficial properties are a results of greater knowledge utilization, tariff hikes, and ongoing infrastructure investments.
“The federal government shouldn’t be so extractive of the typical Nigerian,” stated ALTON’s Adebayo. “Somebody recharging ₦1,000 will really feel this 5% tax essentially the most. It additionally locations an extra compliance burden on operators to gather and remit the tax.”
They argue that short-term tax income shouldn’t come at the price of long-term progress. Because the invoice awaits harmonisation between the Senate and Home of Representatives earlier than it’s forwarded to the President for assent, all eyes stay on whether or not the Tinubu administration will heed the telecom business’s calls or press forward with its broader fiscal ambitions.
