NASS to Reintroduce 5% Excise Duty on Telecom & Betting Services

The National Assembly is planning to reintroduce a 5 percent excise duty on telecommunications services, gaming, betting, and lottery activities in Nigeria, despite a prior exemption granted by former President Muhammadu Buhari.

On July 6, 2023, President Bola Tinubu had signed executive orders that included a suspension of the excise tax to alleviate the financial burden on businesses and households amid rising taxes.

The new bill specifies that the excise duty will apply to all services provided in Nigeria, with the amount based on what service providers charge, whether in cash or equivalent value.

It states: “Services, including telecommunications, gaming, gambling, betting, and lotteries... shall be subject to excise duties at rates specified under the Tenth Schedule to this Act”.

Additionally, the bill introduces guidelines for currency exchange transactions involving the naira. It mandates that any transaction rate exceeding the official market rate set by the Central Bank of Nigeria (CBN) will incur an excise duty on the excess amount. This duty will be assessed on a self-assessment basis as outlined in the Nigeria Tax Administration Act.

As authorities seek to widen the revenue base amidst fiscal pressures, this proposed tax is seen as a strategy to boost non-oil revenue in light of rapid growth in both the telecommunications and betting sectors.