• Wednesday, May 29, 2024
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BusinessDay

FG eyes telecom tax to boost revenue

Group calls for tax automation in Ebonyi
The Federal Government is considering introducing an excise on telecom services, among other fiscal measures, to boost its revenue.
This is part of efforts to raise non-oil revenues and safeguard oil and gas revenues, according to the Stakeholder Engagement Plan for Nigeria – Accelerating Resource Mobilisation Reforms (ARMOR) P-For-R (P177308) program dated March 2024, between Nigeria and the World Bank.
Part of the document highlights that without decisive actions and reforms to marshal fiscal resources, as supported by the Strategic Revenue Growth Initiative (SRGI) and the ARMOR operation, Nigeria will not be able to provide sufficient resources to deliver quality public services and could risk reversing its development progress by decades.
Part of the planned domestic revenue mobilisation drive in the government ARMOR program seeks to increase revenue in some targeted industries and sectors of the economy. This includes the “introduction of excises on telecom services requires that all telcos are mobilised to fully participate in the collection of such revenue.”
Others include the introduction of an Electronic Money Transfer levy on electronic money transfers through the Nigerian Banking System, among others.
The document added, “Services that will be subjected to the newly introduced excises are regulated by key public sector agencies. The introduction of the new revenue measures will require the application of existing regulatory mechanisms available within these institutions. The concerned institutions include the Nigerian Communication Commission and the Central Bank of Nigeria.”
Excise on telecom services is not new. It was first suggested in 2022 and kicked against before it was suspended. At the time, it was pegged at 5 per cent. In July 2023, Bola Tinubu, the President of Nigeria, ordered its suspension. However, the 2024-2026 Medium-Term Expenditure Framework and Fiscal Strategy Paper revealed that part of efforts to improve customs revenue collections would be the full implementation of excise duty on telecoms.
However, this suspension may be lifted as part of the requirements to meet the target for a new, yet-to-be-approved World Bank loan. According to reports, implementing the telecom tax and other fiscal measures may qualify the country for a $750 million loan from the World Bank