FG has proposed a 5% excise duty on Telecom, Gaming and Betting Services in Nigeria.
NewsOnline Nigeria reports that the Federal Government has introduced a new bill proposing a 5% excise duty on telecommunications, gaming, and betting services as part of a broader effort to overhaul the nation’s tax framework.
This proposal, which is contained in the “Nigeria Tax Act,” aims to impose excise duties on various services across the country.
ALSO: Gowon Finally Opens Up On Biafran Civil War, Aburi Accord With Ojukwu
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 obtained from the National Assembly and is dated October 4, 2024.
Tax on telecoms, gaming, and betting
Under the provisions of the bill, the government will impose a 5% excise duty on telecommunications services, both postpaid and prepaid, regulated by the Nigerian Communications Commission. This duty will also apply to gaming, gambling, lotteries, and betting activities in Nigeria.
According to the document, “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.”
This means that all transactions linked to these services will attract the excise duty once the bill is enacted.
Currency transactions and regulations
Additionally, the bill seeks to regulate currency transactions by specifying that any differences between the official Central Bank of Nigeria (CBN) exchange rate and the actual transaction rate will attract excise duties.
The bill states that any excess value in the exchange rates will be paid as excise duty under a self-assessment model.
It states, “Where an exchange of currency transaction involving the Naira is conducted within or outside Nigeria – (a) the transaction shall be conducted at an exchange rate not exceeding the prevailing exchange rate at the official market authorised by the Central Bank of Nigeria; and (b) where the exchange rate of the transaction exceeds the prevailing exchange rate at the official market authorised by the Central Bank of Nigeria, the excess shall be payable as excise duty by the seller on a self-assessment basis as provided in the Nigeria Tax Administration Act.”
What you should know
This new tax regime is part of the government’s broader strategy to increase non-oil revenue amidst growing fiscal pressures. With the rapid expansion of Nigeria’s telecom and betting sectors, authorities see this bill as a way to widen the country’s revenue base.
By implementing excise duties on popular sectors, such as telecommunications and betting, the government aims to mitigate revenue challenges and improve the regulation of currency exchanges.
If passed, the new bill will significantly impact the cost of telecom services and betting activities, as they will be subject to excise duties. The government is optimistic that the bill will help boost revenue collection while aligning currency exchange practices with official CBN rates.
