FG scraps 5% excise duty on telecom services to ease cost burden

Joy Agwunobi

The federal government has revoked the 5 per cent excise duty tax previously imposed on telecommunications services, including voice calls and data subscriptions, in a move expected to ease cost pressures for millions of Nigerians.

The National Orientation Agency (NOA) disclosed the development in a post on its official X (formerly Twitter) handle, citing Aminu Maida, Executive Vice Chairman of the Nigerian Communications Commission (NCC). According to Maida, President Bola Tinubu ordered the removal of the tax during discussions on the recently passed Finance Act.

The excise duty, first announced in 2022 under the administration of former President Muhammadu Buhari, had drawn sustained criticism from industry stakeholders and consumer rights groups, who argued that it would worsen the financial strain on households already battling high living costs.

Telecom operators, under the Association of Licensed Telecom Operators of Nigeria (ALTON), also opposed the levy, warning that it would be counterproductive given that Nigeria’s telecom industry already bears one of the highest tax burdens in sub-Saharan Africa.

The Buhari administration had defended the policy as a revenue-boosting measure in response to dwindling oil earnings, insisting it aligned with global taxation practices. However, consumer advocates maintained that the levy would only exacerbate affordability challenges in a market where more than 171 million active telecom subscribers rely heavily on mobile services.

The policy reversal comes at a time when telecom users are still reeling from the rise in service costs. Earlier this year, the NCC approved a 50 percent tariff increase after operators, citing inflation, rising fuel and energy prices, foreign exchange shortages, and higher equipment import costs, had pushed for as much as a 100 percent adjustment. The Commission settled on the 50 percent hike as a compromise between operators’ survival concerns and the need to protect consumers.