‘How 5% tax removal will boost investments, reduce telecom tariffs’

President Bola Tinubu has “permanently” removed a 5% tax on telecommunications services, according to the Nigerian Communications Commission (NCC). This is the third time the federal government would be removing the controversial tax. Aminu Maida, who is the executive vice-chairman of the NCC, told newsmen in Abuja last week that the tax, which had been […]

President Bola Tinubu has “permanently” removed a 5% tax on telecommunications services, according to the Nigerian Communications Commission (NCC). This is the third time the federal government would be removing the controversial tax.

Aminu Maida, who is the executive vice-chairman of the NCC, told newsmen in Abuja last week that the tax, which had been temporarily stopped, has now been completely scrapped under new tax laws.

But Daily Trust reports that the new tax takes effect from January 2026.

“The excise duty, it was the 5 percent or so, that is no longer there,” Maida told reporters in Abuja.

The NCC boss said: “Before it was suspended, but now the president has been magnanimous to remove it entirely. I was in a room when it was raised, and he said, no, we cannot put this on Nigerians. I was very pleased when the bills came out and we saw his words were followed through.”

The 5% tax on telecommunications services has had a complicated history over the past year and a half.

 

Background

In July 2023, President Tinubu signed four executive orders that temporarily suspended the 5% tax on phone and internet services. The government said this was done to reduce the negative effects of tax changes on businesses and ordinary families.

However, things took a different turn in October 2024. The National Assembly proposed bringing back the tax on telecommunications services, as well as on gaming, betting, and lottery activities.

The telecommunications industry strongly opposed bringing the tax back. The Association of Telecommunications Companies of Nigeria (ATCON) rejected the proposal, arguing that it would be unfair for the government to impose the tax when phone and internet companies were already struggling to keep their services running.

The report of a six-member committee set up in September 2022 had recommended the exclusion of the proposed, and then suspended 5% excise duty, citing incontrovertible facts including; the unprecedented contribution of the sector to the nation’s Gross Domestic Product (GDP), the sustained quantum leap in government’s revenue due to contribution from the sector, its position as the baseline driver of innumerable businesses at the Micro, Medium and Small scale levels, among others reasons.

The Committee further analyzed the existing forty one (41) taxes, levies and charges already imposed on the sector and concluded that instead of burdening the sector with more taxes, concessions should be considered, in order to sustain its unprecedented contributions to the growth of the Nigerian economy.

Based on the strength of its findings, the Committee prayed that the then President Buhari exempts the Digital Economy Sector from the proposed additional Excise Duty.

Experts had emphasized that besides overburdening the sector, imposing additional taxes would bring hardship to the citizens of the country and appealed to the President’s compassion in his decision.

Buhari on March 13, 2023, approved that the government exempts the Digital Economy Sector from excise duty charges in order to sustain and enhance use of Digital Economy services and to further benefit from their positive impacts on the economy.

 

Telcos, consumer rights groups kicked against reintroduction

Telecommunications Operators and consumer rights groups in the country had kicked against the reintroduction of “controversial” 5% excise tax on telecom services embedded in the Nigeria Tax Bill 2024.

The proposed law which was passed in the Senate on May 8, 2025, reintroduced the 5% excise tax on telecom services first introduced in the Finance Act of 2020 under former President Muhammadu Buhari.

It was suspended by President Bola Ahmed Tinubu in July 2023, on the argument that it has the potential to worsen inflation and impede access to digital services.

Passed and signed then to expand the list of goods and services subject to excise taxes, the excise tax on telecom services was met with stiff resistance from telecom operators and consumer advocates.

They warned it would raise the cost of already essential services in a struggling economy.

The chairman of Association of Licensed Telecommunications Operators of Nigeria (ALTON), Engr. Gbenga Adebayo said the 5% tax on telecom services would have eroded the operators profits and prevent them from investing more on their networks.

Adebayo who is the official spokesman for all the telcos said the industry wouldn’t have accepted the tax.

 

We pay 54 different taxes – Telcos

As of August 2024, telecom operators reportedly paid 54 different taxes, according to ALTON. They said with the sector just rebounding from currency devaluation and rising operational costs, the 5% excise duty would have choked recovery efforts and slowed digital inclusion.

An excise duty, however, is a specific type of tax that is levied on certain goods or services at the time of their purchase. The Nigerian Tax Bill describes excisable transactions as “transactions which take place— (a) physically in Nigeria, the excisable transaction is the provision of the service; and (b) remotely or virtually, the excisable transaction is the receipt or consumption of the service in Nigeria.”

That means both domestic and international service providers offering telecom services in Nigeria would be liable to collect and remit the 5% tax, passing the cost on to the customers.

 

Consumer rights groups commend FG

Two telecom consumer rights groups – the National Association of Telecommunications Subscribers of Nigeria (NATCOMS) and Association of Telephone, Cable TV and Internet Subscribers (ATCIS) – have both commended the FG for removing the 5% telecom tax.

NATCOMS’ president, Chief Deolu Ogunbanjo said his association would now discontinue its court case it instituted against the government on the illegality of the tax.

He said the removal would encourage more foreign and local investors to stake their investments in Nigeria.

On his part, ATCIS’ president, Sina Ilesanmi said removal would likely bring down tariffs as telecom operators would have more money to plough back into their networks thereby improving their networks and gingering healthy competition which brings down tariffs.

 

200 different taxes, levies, fees in Nigeria

The Chairman of the Presidential Committee on Tax and Fiscal Reform, Dr Taiwo Oyedele, had said about 200 different types of taxes, levies, duties and fees are paid by business owners, industrialists and entrepreneurs doing business in Nigeria.

Oyedele also said telecom operators alone pay about 90 different taxes, levies, fees and duties to various state and non state actors across the country.

Speaking at the first edition of annual workshop for Attorneys General on emerging issues in the communications sector organised by the Nigerian Communications Commission (NCC) in Lagos, recently, Oyedele had said about 60 state and non-state actors collect taxes, levies, fees and duties across the country.

 

We must harmonise tax regimes – NCC

The Executive Vice Chairman of NCC, Dr Aminu Maida appealed to attorneys general of the 36 states to work together with NCC and the Presidential Tax and Fiscal Reform Committee to harmonise tax regimes and remove disincentives to investment and economic growth.

Maina expressed sadness over fragmented oversight among various tax collectors at federal, state and local government levels.

This, the NCC boss said, creates confusion and inefficiencies and reduces the revenue that should have been accrued to the country’s coffers.

He therefore called on the state AGFs to explore reforms that enhance coordination and legal clarity across agencies.

This will help ensure that innovation and investment continue to happen within a structure that promotes, fairness, accountability, and long-term stability.

According to him, streamlining taxation in the communications sector will go a long way to attract many investors to the country.

The telecom industry being one of the most lucrative sectors in the country is faced by multiple taxes which continue to weigh on its operators’ investment.

The chairman of Association of Telecommunications Operators of Nigeria (ALTON), Engr Gbenga Adebayo had said that substantive part of the operators’ profits were being used to pay taxes and levies.

He called on the federal government to do something to save the investment in the sector.