NASS Proposes Reintroduction of 5% Excise Duty on Telecom, Betting Services

The National Assembly has initiated a proposal to reintroduce a 5% excise duty on telecommunications services, as well as on gaming, betting, and lottery activities in Nigeria. This move comes despite a previous exemption granted to the telecom sector by former President Muhammadu Buhari.

President Bola Tinubu had earlier signed four executive orders on July 6, 2023, one of which suspended the excise tax on telecom services in a bid to alleviate the financial burden on businesses and households amid rising tax rates. However, the newly introduced executive bill, known as the ‘Nigeria Tax Bill 2024’, seeks to reinstate this excise duty.

The bill outlines that the excisable transaction amount will be calculated based on the service provider’s charges, whether in monetary terms or equivalent value. It specifies, “Services, including telecommunications, gaming, gambling, betting, and lotteries, however described, provided in Nigeria, shall be subject to excise duties at rates specified under the Tenth Schedule to this Act, in a manner prescribed by the Service.”

Furthermore, the proposed legislation includes stipulations regarding currency exchange transactions involving the naira. It mandates that such transactions adhere to the prevailing exchange rate set by the Central Bank of Nigeria (CBN). If the exchange rate of a transaction exceeds the official market rate, the excess will be subject to excise duty, which will be assessed on a self-assessment basis under the Nigeria Tax Administration Act.