Despite a previous exemption of the telecom sector from the 5 per cent excise duty approved by former President Muhammadu Buhari, National Assembly has revived the push for its implementation.
The National Assembly has proposed a 5 per cent excise duty on telecommunications services, gaming, betting and lottery activities in the country.
On July 6, 2023, President Bola Tinubu signed four executive orders, one of which suspended the 5 per cent excise tax on telecommunication services to mitigate the adverse effects of tax increases on businesses and households.
However, an executive bill titled ‘Nigeria Tax Bill 2024’ seeks to reintroduce this excise duty.
According to the bill, the excisable transaction amount will be based on the service provider’s charge, whether in monetary terms or equivalent value.
The bill states: “Services, including telecommunications, gaming, gambling, betting, and lotteries, however, described, provided in Nigeria, shall be subject to excise duties at rates specified under the Tenth Schedule to this Act, in a manner prescribed by the Service.”
Additionally, the bill includes provisions related to currency exchange transactions involving the naira. It mandates that such transactions must not exceed the prevailing exchange rate at the official market, as authorized by the Central Bank of Nigeria, CBN.
In cases where the exchange rate of a transaction exceeds the official market rate, the excess amount will be payable as excise duty by the seller, assessed on a self-assessment basis under the Nigeria Tax Administration Act.
– Vanguard
