The Federal Government has proposed a groundbreaking five percent excise duty on telecommunications services, gaming, and betting activities as part of a sweeping new bill aimed at overhauling Nigeria’s tax framework.
This bold move is designed to bolster non-oil revenue amidst mounting fiscal pressures.
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,” the bill dated October 4, 2024, seeks to introduce excise duties on various services provided in Nigeria, including:
– _Telecommunications_: Postpaid and prepaid services regulated by the Nigerian Communications Commission
– _Gaming_: Online and offline gaming services
– _Gambling_: Lottery, betting, and other gaming activities
– _Lotteries_: All forms of lottery services
A section of the bill states, “The amount of an excisable transaction is the amount chargeable for the service by the service provider, both in money or money’s worth.” Furthermore, the bill introduces guidelines on currency transactions, specifying that any difference between the prevailing Central Bank of Nigeria exchange rate and the actual transaction rate will be subject to excise duty.
With the rapid growth in the telecoms and betting sectors, authorities are looking to widen the revenue base. The new tax regime is expected to contribute significantly to the government’s revenue drive, helping to alleviate fiscal pressures. This move is also seen as a strategic step towards ensuring that currency exchanges align with official CBN rates.
