Nigerian telecom subscribers could soon pay 5% more for calls and data as the Senate passed the Nigeria Tax Bill 2024 on May 8, reviving a controversial excise duty on telecom services.

If signed into law, the bill would reintroduce a tax previously suspended by President Bola Tinubu in 2023 over inflation concerns.

Telecom operators have raised alarm, warning that the tax will drive up consumer costs and threaten digital inclusion across the country. The Association of Licensed Telecom Operators of Nigeria says the sector is already burdened by excessive taxation — 54 levies as of August 2024 — and recovering from economic shocks including naira devaluation and surging operational expenses.

“We’ve had no clarity on how this tax will be implemented, but the burden will fall squarely on the consumer,” said ALTON President Gbenga Daniel. “Telecom services should be treated as essential infrastructure, not luxury goods.”

Originally introduced under the Finance Act 2020 during former President Muhammadu Buhari’s administration, the excise tax was intended to broaden the range of taxable goods and services. It was met with fierce opposition from operators and consumer advocates, who said it would inflate the cost of basic services in a struggling economy.

President Tinubu suspended the tax in July 2023, citing its inflationary risks and potential to hamper access to digital services. Now, nearly two years later, the industry fears its return will undo recovery gains.

“The new tax will squeeze margins and hit consumers the hardest,” said Anthony Emoekpere, President of the Association of Telecommunications Companies of Nigeria. “Operators are already working with tariffs that don’t reflect real costs.”

Under the proposed law, the 5% excise duty would apply to all telecom services consumed within Nigeria — whether provided domestically or remotely by international platforms. Operators would be responsible for collecting and remitting the tax, passing the cost to subscribers.

The move comes at a critical time. Major players like MTN Nigeria and Airtel Africa are just beginning to rebound financially. MTN recently reported a ₦133.7 billion profit for Q1 2025, reversing a ₦392.7 billion loss from the previous year, while Airtel Africa posted $661 million in pre-tax profit for the year ending March 2025.

Industry leaders insist telecoms should not be taxed like tobacco, alcohol, or luxury goods. “Someone recharging ₦1,000 will feel this 5% the most,” said ALTON’s Executive Secretary, Gbolahan Adebayo. “This is not just about tax collection — it’s about digital access, compliance burdens, and long-term growth.”

The Nigeria Tax Bill does offer some reliefs — including 0% VAT on essentials such as food, healthcare, rent, education, and public transport. According to Taiwo Oyedele, Chair of the Presidential Fiscal Policy and Tax Reforms Committee, these account for over 80% of household spending, and nearly 100% for low-income families.

Still, the telecom sector remains uneasy. The Nigerian Communications Commission has yet to officially receive the bill for regulatory review, according to its Head of Public Affairs, Nnenna Ukoha.