The proposed bill by Nigeria’s Federal Government, which introduces a five percent excise duty on telecommunications services, gaming, and betting activities, represents a significant shift in the country’s tax framework. The legislation aims to consolidate existing tax laws while introducing new levies to boost non-oil revenue in light of Nigeria’s fiscal pressures.
Under this new bill, telecom services, including both prepaid and postpaid plans regulated by the Nigerian Communications Commission (NCC), would be taxed at five percent. Similarly, services in the rapidly expanding gaming, gambling, and betting sectors would also be subject to the same duty. The government’s intent is to capitalize on the growth of these industries, thereby broadening its revenue base.
Additionally, the bill includes provisions related to currency transactions. Specifically, it introduces excise duties on any discrepancies between the official Central Bank of Nigeria (CBN) exchange rate and actual transaction rates, potentially affecting those dealing with foreign currency exchanges.
This proposed tax reform is part of a broader strategy to diversify government income away from its dependence on oil revenue, leveraging sectors that have seen significant growth in recent years. However, it could also have implications for consumers and businesses in affected sectors, potentially leading to higher costs for telecom services and gaming-related activities.
Key points of the bill include:
Telecoms services: Postpaid and prepaid services regulated by the Nigerian Communications Commission (NCC) will attract a five per cent excise duty.
Gaming, gambling, and betting: These activities will also be subject to the same five per cent excise duty.
Currency transactions: The bill sets guidelines for transactions involving currency exchanges. Any difference between the actual transaction rate and the Central Bank of Nigeria’s (CBN) official exchange rate will be subject to excise duty, operating under a self-assessment model.
This proposal is part of the government’s broader effort to boost non-oil revenues amid economic pressures. By targeting high-activity sectors like telecommunications and gambling, the bill reflects a shift towards expanding the tax base to ensure sustainable public finance.
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