The Federal Government is considering reintroducing telecom tax and other fiscal measures as part of efforts to secure a new $750 million loan from the World Bank.
According to the Stakeholder Engagement Plan for Nigeria – Accelerating Resource Mobilisation Reforms program, the government may reintroduce excises on telecom services and EMT levy on electronic money transfers through the Nigerian Banking System, among other taxes
President Bola Tinubu had suspended the five per cent excise duty on telecommunications and the Import Tax Adjustment levy on certain vehicles in July 2023.
However, negotiations are ongoing between the government and the World Bank to potentially lift this suspension to meet the targets for the new loan.
The program aims to strengthen the government’s financial position by improving tax and customs compliance, protecting oil revenues, and mobilizing domestic resources effectively. The planned tax reforms under the ARMOR program are expected to have significant implications across various economic sectors.
The World Bank’s contribution of $750m is a substantial portion of the program’s budget, with the government expected to contribute $1.17bn annually.
Indeed, there no doubt that key industry groups, including telecom and banking service providers, manufacturers of goods, and the general tax-paying public, will be affected by the proposed tax reforms.
However, stakeholders, such as the Association of Licensed Telecom Operators of Nigeria, are being engaged regarding the excise duties on telecom services.
The introduction of excises on telecom services and EMT levy on electronic money transfers through the Nigerian Banking System will require the cooperation of all relevant stakeholders to ensure successful implementation.