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The Federal Government of Nigeria has put forward a proposal to introduce a 5% excise duty on telecommunications services, gaming, and betting activities as part of a broader effort to revamp the nation’s tax system. This proposal is included in a new bill aimed at overhauling Nigeria’s tax framework.
The bill, titled “A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions, and Instruments, and Related Matters,” was dated October 4, 2024, and obtained from the National Assembly.
An analysis of the bill reveals its intention to impose excise duties on services such as telecommunications, gaming, gambling, lotteries, and betting within Nigeria.
A specific provision of the bill reads, “The amount of an excisable transaction is the amount chargeable for the service by the service provider, both in money or money’s worth. Services, including telecommunications, gaming, gambling, betting, and lotteries however described, provided in Nigeria shall be charged with duties of excise at the rates specified under the Tenth Schedule to this Act in a manner as may be prescribed by the Service.”
The excise duty structure outlined in the bill indicates that telecommunications services, including both postpaid and prepaid services regulated by the Nigerian Communications Commission, will attract a 5% duty. The same rate will apply to gaming, gambling, betting, and lottery services.
In addition to these measures, the bill introduces new guidelines concerning currency transactions. It specifies that any difference between the Central Bank of Nigeria’s (CBN) official exchange rate and the actual transaction rate will be subject to excise duty.
This new tax regime is part of the government’s strategy to increase non-oil revenue in response to ongoing fiscal pressures. With significant growth in the telecommunications and betting sectors, the government aims to widen its revenue base by tapping into these industries.
Furthermore, the bill seeks to ensure that currency exchange practices align with official CBN rates, with any surplus subject to excise duty under a self-assessment model, reinforcing transparency and accountability in Nigeria’s tax system.
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