The telecommunications and gaming sector in Nigeria is currently at the centre of a controversial decision by the National Assembly. A bill seeking to reinstate a 5% excise tax on these services is drawing strong reactions despite the recent exemption granted by former President Muhammadu Buhari.
The tax was initially suspended by President Bola Tinubu through his executive orders of 6th July 2023, in a bid to ease the financial burden on businesses and households. However, the bill titled the ‘Nigeria Tax Act 2024’ now seeks to reintroduce the tax on telecommunications services, gaming, betting and lotteries across the country.
Specifically, the taxable amount will be determined based on the fees charged by service providers, whether in monetary terms or in equivalent value. The Act clearly states that “services, including telecommunications, gaming, betting and lotteries, provided in Nigeria, shall be subject to excise taxes at the rates specified in the Tenth Schedule of this Act, in such manner as the Service may prescribe.”
Furthermore, the legislation also addresses foreign exchange transactions involving the naira, specifying that such transactions shall not exceed the official exchange rate authorized by the Central Bank of Nigeria (CBN). Anything in excess of this official rate shall be subject to excise tax, assessed on a self-assessment basis in accordance with the Nigerian Revenue Service Act.
This decision to reinstate the excise tax raises concerns about its impact on consumers and operators in the sector. It is therefore crucial that the authorities carefully assess the impact of this measure on the Nigerian economy and population at large.
Ultimately, this proposal to reinstate the excise tax on telecommunications and gaming services in Nigeria is generating a lively debate within the country. It remains to be seen how this decision will be finalized and what consequences it will have on the stakeholders involved and on the national economy as a whole.