The Federal Government of Nigeria has proposed a five per cent excise duty on telecommunications services, gaming, and betting activities as part of a new bill aimed at overhauling the country’s tax framework.
This move is intended to boost revenue collection and enhance fiscal sustainability.
The bill, 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 to Provide for Taxation of Income, Transactions, and Instruments, and Related Matters,” was dated October 4, 2024, and obtained from the National Assembly, according to The Punch.
The proposed legislation aims to introduce excise duties on various services, including telecommunications, gaming, gambling, lotteries, and betting within Nigeria.
This analysis highlights the government’s strategy to expand the tax base and increase revenue from these rapidly growing sector.
A section of the bill read, “The amount of an excisable transaction is the amount chargeable for the service by the service provider, both in money or money’s worth.
“Services, including telecommunications, gaming, gambling, betting, and lotteries however described, provided in Nigeria shall be charged with duties of excise at the rates specified under the Tenth Schedule to this Act in a manner as may be prescribed by the Service.”
The proposed bill outlines a structured excise duty where telecommunications services, including both postpaid and prepaid offerings regulated by the Nigerian Communications Commission, will incur a five per cent duty.
This means that consumers could see a rise in their service costs, as providers may pass on the additional tax burden.
The same rate will apply to gaming, gambling, betting, and lottery services.
The bill also establishes guidelines for currency transactions, stating that any discrepancy between the prevailing Central Bank of Nigeria exchange rate and the actual transaction rate will be subject to excise duty.
This measure is part of the government’s strategy to enhance non-oil revenue in light of ongoing fiscal pressures.
With the rapid growth in the telecommunications and betting sectors, authorities aim to broaden the revenue base, recognizing these industries as significant sources of potential tax income.
This move reflects a shift towards diversifying revenue sources and reducing reliance on oil
export.
