FG proposes 5% Excise Duty on Telecoms, Gaming Services to Boost Revenue
The Federal Government has proposed a five per cent excise duty on telecoms services, gaming, and betting activities.
This initiative comes as part of a new bill aimed at overhauling the country’s taxation system, officially 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.”
The bill was dated October 4, 2024, and has recently been obtained from the National Assembly.
An in-depth analysis of the proposed legislation reveals that it seeks to impose excise duties on various services, including telecoms, gaming, gambling, lotteries, and betting operations conducted within Nigeria.
The bill outlines that the excise duty will be applied to the total amount charged by service providers, whether in cash or in kind.
Specifically, the bill states, “Services, including telecoms, 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.”
Breaking down the new tax structure, telecoms services—covering both postpaid and prepaid plans—will be subject to the proposed five per cent excise duty. This rate will similarly apply to all gaming, gambling, betting, and lottery services.
Additionally, the bill introduces comprehensive guidelines on currency transactions, stipulating that any discrepancies between the prevailing exchange rate set by the Central Bank of Nigeria (CBN) and the actual transaction rate will incur excise duties.
This new tax initiative is part of the government’s broader strategy to enhance non-oil revenue streams in response to ongoing fiscal pressures. With the telecoms and betting sectors experiencing rapid growth, the government aims to broaden its revenue base and stabilize the economy.
The bill also emphasizes aligning currency exchanges with official CBN rates, mandating that any excess over the established rate be paid as excise duty under a self-assessment model.
