The Federal Government (FG) has removed the 5% excise duty on telecommunications services, easing costs for millions of Nigerian subscribers.
Executive Vice Chairman of the Nigerian Communications Commission (NCC), Aminu Maida, confirmed that President Bola Tinubu ordered the levy’s removal during Finance Act discussions. According to him, the directive is expected to relieve over 171 million active telecom users.
The excise duty was first introduced in 2022 under the Muhammadu Buhari administration as part of plans to expand non-oil revenue. It applied to both voice and data services, with operators required to remit payments monthly.
From inception, the tax drew criticism from telecom operators. The Association of Licensed Telecom Operators of Nigeria (ALTON) argued that companies were already subject to multiple taxes, including 7.5% VAT, a 2% NCC levy on annual revenue, and other charges.
Operators said they could not absorb the new cost, leading to its transfer to subscribers. The levy pushed the effective tax burden on telecom services to about 12.5%, worsening consumer strain amid high living costs and rising operational expenses such as diesel for powering base stations.
Earlier this year, the NCC approved a 50% tariff increase after operators sought as much as 100%, citing inflation, forex shortages, energy costs, and equipment importation expenses. Data prices rose sharply, with a 1.8GB plan moving from N1,000 to N1,500 and 20GB rising from N5,500 to N7,500. SMS costs also climbed from N4 to N6.
The removal of the 5% excise duty now comes as a relief, although households remain affected by tariff hikes. The policy reversal highlights the administration’s attempt to balance revenue generation with consumer protection in the telecom sector, okay.ng reports.
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