Nigeria may reinstate a 5% excise tax on telecom services, as proposed in the 2024 Finance Bill passed by the Senate last week. The tax would apply to data and voice services.
Initially introduced in 2020 under former President Buhari to broaden the tax base, the levy was suspended in 2023 by President Bola Tinubu in response to soaring inflation. However, with mounting fiscal pressures, the government is now revisiting the policy.
Telecom operators warn that reintroducing the tax would increase service costs and hinder efforts to bridge Nigeria’s digital divide, with over 40% of the population still lacking internet access.
Gbenga Adebayo, Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), criticized the proposal for its lack of clarity and potential impact on consumers.
“We’ve received no details on how this 5% tax would be implemented, but it’s clear the burden will fall on users. Telecom services should be treated as essential infrastructure, not taxed like luxury goods. No serious economy taxes telecoms in this manner,” Adebayo said.
ALTON also highlighted that telecom operators already face 54 different taxes across Nigeria. The Nigerian Communications Commission (NCC) has yet to receive the official bill for review.
Industry analysts warn that the tax could discourage investment in digital infrastructure, threatening recent sector gains. MTN Nigeria reported a Q1 2025 profit of ₦133.7 billion ($83.3 million), while Airtel Africa announced a pre-tax profit of $661 million for its financial year ending March 2025.
With internet access increasingly vital for education, healthcare, and employment, experts argue that higher telecom costs risk deepening Nigeria’s digital divide. They advocate for long-term strategies focused on investment and connectivity rather than short-term tax fixes.
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