Good News as FG Removes 5% Telecom Tax on Voice, Data Services

• Amid criticism and public backlash, the federal government scrapped 5% excise duty on voice calls and data services
• The tax was introduced under the former president Muhammadu Buhari administration to raise funds for the government
• NCC boss Aminu Maida said Tinubu approved the removal to support households and businesses

Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Federal Government has revoked the 5% excise tax previously imposed on telecommunications services in Nigeria, a move expected to ease cost pressures for millions of mobile users.

The National Orientation Agency announced this in a post on its official X handle on Thursday, September 11.

The tax, which was intended to apply to both voice calls and data, had drawn widespread criticism from industry players and consumer advocates since its introduction under the Muhammadu Buhari administration.

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Aminu Maida, Executive Vice Chairman of the Nigerian Communications Commission (NCC), disclosed that President Tinubu directed the removal of the tax during discussions on the recently passed Finance Act.

He added:

"The development is expected to bring relief to over 171 million active telecom users across the country, many of whom have faced a 50% tariff increase implemented earlier this year."

According to Maida, the excise fee, which was first suspended in 2023, has now been formally eliminated due to updated national tax legislation, Punch reports.

Maida stated:

“The 5% excise duty is no longer in effect. Initially, it was only suspended, but the President has now permanently removed it. I was present when the issue was raised, and he firmly stated, ‘No, we cannot place this burden on Nigerians.’ I was pleased to see that this directive was upheld in the new legislation.”

Data, voice tax under Buhari

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Both voice calls and data subscriptions were introduced under the administration of former President Muhammadu Buhari.

Consumer advocacy groups and industry stakeholders, including the Association of Telecommunications Companies of Nigeria (ATCON), have strongly opposed the levy on mobile voice and data services, arguing it would raise digital access costs and threaten the survival of telecom operators already burdened by high operating expenses.

ATCON had earlier said that the tax would impair service affordability and impede sector growth.

Also, as part of an effort to lessen the impact of numerous tax burdens on consumers and businesses, President Tinubu initially suspended the tax in July 2023 as part of a larger fiscal policy change.

Shortly after taking office, he signed a number of executive orders that resulted in the suspension.

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In a related development, Legit.ng reported that currently, telecom companies are under intense pressure from the federal government to enhance their services, particularly after a recent pricing hike of 50%.

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The Nigerian Communications Commission (NCC) has responded to subscribers' demands by implementing a new plan that will increase industry regulation, improve services and transparency, and eventually boost customer confidence.

Proofreading by James Ojo, copy editor at Legit.ng.

Source: Legit.ng