As part of a new plan to restructure Nigeria’s tax framework, the Federal Government proposes a 5% excise levy on telecommunications services, gaming, and betting operations.
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 draft legislation, the bill seeks to impose excise duty on services such as telecoms, gaming, gambling, lotteries, and betting in Nigeria.
A section of the bill read, “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.”
A breakdown of the excise duty structure in the bill reveals that telecom services, including postpaid and prepaid services regulated by the Nigerian Communications Commission, will be subject to a 5% charge.
The same charge will be applicable to gaming, gambling, betting, and lottery services.
The bill also establishes criteria for currency transactions, stating that any discrepancy between the current Central Bank of Nigeria exchange rate and the actual transaction rate will be subject to excise duty.
The new tax regime is part of the government’s attempt to increase non-oil revenue despite fiscal constraints. With substantial expansion in the telecom and betting sectors, authorities are aiming to broaden their revenue source.
The measure also attempts to ensure that currency trades are in line with official CBN rates, with any excess charged as excise duty via a self-assessment methodology.
