Federal Government Introduces Plan For 5% Tax On Telecommunications

Federal Government Introduces Plan For 5% Tax On TelecommunicationsThe Federal Government has proposed a five percent excise duty on telecommunications services, as well as gaming and betting activities, in a new bill aimed at overhauling Nigeria’s tax framework. Titled “A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks Relating to Taxation and Enact the Nigeria Tax Act,” the bill was dated October 4, 2024, and is sourced from the National Assembly.....KINDLY READ THE FULL STORY HERE▶

An analysis of the proposed legislation indicates that it aims to introduce excise duties on services such as telecommunications, gaming, gambling, lotteries, and betting provided within Nigeria. The bill specifies that the excise duty will be based on the chargeable amount for these services, whether in monetary form or equivalent value.

According to the bill, “Services, including telecommunications, gaming, gambling, betting, and lotteries, provided in Nigeria shall be charged excise duties at the rates specified under the Tenth Schedule to this Act, as prescribed by the Service.”

The excise duty structure outlined in the bill reveals that both postpaid and prepaid telecom services regulated by the Nigerian Communications Commission will be subject to the five percent duty. This rate will also apply to gaming, gambling, betting, and lottery services.

Additionally, the bill introduces guidelines for currency transactions, indicating that any discrepancy between the Central Bank of Nigeria’s exchange rate and the actual transaction rate will incur excise duty.

This new tax regime is part of the government’s strategy to enhance non-oil revenue amidst ongoing fiscal challenges. With the telecom and betting sectors experiencing rapid growth, authorities aim to expand the revenue base. The bill also seeks to ensure that currency exchanges are consistent with official CBN rates, with any excess treated as excise duty under a self-assessment model.

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