Nigerians may soon face higher costs for phone calls and data services under a proposed 5% telecom tax.
The Nigeria Tax Bill 2024, passed by the Senate on May 8, 2025, aims to reintroduce a 5% excise duty on telecom services. This move has sparked concerns among industry stakeholders and consumers about its potential impact on digital inclusion and economic growth.
Telecom operators argue that the tax will burden consumers and hinder the country’s push for broader digital access. They point out that the sector already pays numerous taxes and faces rising operational costs. The reintroduction of the excise duty could exacerbate these challenges, leading to higher prices for essential services.
Industry concerns over Tax Implementation
Gbenga Daniel, President of the Association of Licensed Telecom Operators of Nigeria (ALTON), stated that the burden of the tax would ultimately fall on consumers. He emphasized that telecom services should be treated as essential goods, not luxury items subject to excise duties.
The excise duty, originally introduced in the Finance Act of 2020, was suspended in July 2023 due to concerns about its impact on inflation and access to digital services. Its reintroduction in 2025 has reignited debates about the appropriateness of taxing essential communication services.
ALSO READ
Critics argue that excise taxes are typically reserved for luxury or harmful goods, such as alcohol and tobacco, and should not apply to services like internet access. They warn that the tax could slow down digital inclusion efforts and negatively affect the economy.
The Nigerian Communications Commission (NCC) has yet to receive the official version of the bill for review. Meanwhile, the bill includes some reliefs, such as 0% VAT on essential goods and services like food, healthcare, and education.
As the debate continues, stakeholders urge the government to reconsider the tax’s implications on the telecom sector and the broader economy. They advocate for policies that support digital growth and economic stability without overburdening consumers.
