FG Plans 5% Tax on Telecommunications Services, Gaming, and Betting Activities
The federal government has proposed a 5 percent excise tax on telecommunications services, gaming and wagering as part of a new bill to review Nigeria’s tax framework.
The bill, entitled “A Bill for an Act to repeal certain laws relating to taxation, consolidate the legal framework for taxation, and enact the Nigerian Tax Act providing for the taxation of income, transactions, goods, and related matters,” was submitted by the National Assembly on October 4, 2024.
An analysis of the proposed bill on Friday showed that it seeks to introduce an excise tax on services offered in Nigeria, including telecommunications, gaming, gambling, lotteries, and betting.
A section of the bill states, “The transaction value subject to the excise tax is the amount of money or monetary equivalent that may be charged by a service provider for its services.
“An excise tax shall be levied on telecommunication, gaming, gambling, wagering, lotteries and other services provided within Nigeria at the rates specified in section 10 of this Act and in such manner as the service provider may determine.
A breakdown of the excise tax in the bill shows that telecommunications services, including postpaid and prepaid services regulated by the Nigerian Communications Commission, will be subject to a 5% excise tax.
The same rate would apply to gaming, gambling, betting, and lottery services.
The bill also introduces guidelines for currency transactions, specifying that any difference between the Central Bank of Nigeria’s prevailing exchange rate and the actual transaction rate will be subject to excise tax.
The new tax regime forms part of the government’s strategy to increase non-oil revenues amid tight fiscal conditions.
With the telecommunications and gambling sectors growing rapidly, the authorities are looking to expand their revenue base.
The bill also aims to bring the exchange in line with the official CBN rate, with any excess to be paid as an excise tax under a self-assessment model.
