In a landmark policy shift aimed at easing cost burdens on consumers and boosting Nigeria’s digital economy, President Bola Ahmed Tinubu has approved the removal of the 5 per cent excise duty on telecommunications services under the new tax laws.
The decision, confirmed by the Nigerian Communications Commission (NCC), puts to rest months of uncertainty over the controversial levy that had threatened to increase call and data costs for over 172 million active subscribers in the country.
“The excise duty has been scrapped. It will not come back. This aligns with President Tinubu’s broader tax reforms and his Renewed Hope Agenda to make Nigeria’s business environment more competitive,” said Dr. Aminu Maida, executive vice-chairman of the NCC.
Background of the Controversial Levy
The excise duty was originally introduced in the 2020 Finance Act, sparking strong pushback from telecom operators and consumer advocacy groups who warned that it would stifle industry growth and worsen affordability for Nigerians already battling rising living costs.
In July 2023, President Tinubu suspended the levy via an Executive Order as part of his fiscal reform agenda.
However, discussions around its reinstatement resurfaced in 2024, creating unease in the industry until this latest announcement confirmed its permanent removal.
Implications for Subscribers and the Industry
The cancellation of the 5% duty is expected to:
- Ease Cost Pressure: Consumers could see more affordable voice and data tariffs.
- Boost Digital Inclusion: Lower costs will accelerate broadband adoption, aligning with the government’s push for a 70% broadband penetration target by 2025.
- Stabilize the Telecom Sector: Operators will have more breathing space to invest in infrastructure, especially as Nigeria pushes toward 5G expansion.
Industry analysts say the move is a major win for the ICT sector, which contributes more than 16% to Nigeria’s GDP, and could serve as a signal of the government’s commitment to creating a pro-investment climate.
What This Means Going Forward
While the removal of the tax is a relief, experts note that affordability gains for subscribers will depend on how operators adjust tariffs in response to reduced levies.
The NCC has assured Nigerians that it will continue to engage stakeholders to ensure consumers enjoy the benefits of the policy change.
