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Telecom subscribers in Nigeria could soon be paying 5% more for data and voice services if the Nigeria Tax Bill 2024 is signed into law. Passed in the Senate on May 8, 2025, the bill reintroduces a controversial 5% excise tax on telecom services, a move operators warn would ultimately burden consumers and stall the country’s push for broader digital inclusion.
The 5% excise duty was first introduced in the Finance Act of 2020 under former President Muhammadu Buhari. Designed to expand the list of goods and services subject to excise taxes, it was met with stiff resistance from telecom operators and consumer advocates. They warned it would raise the cost of already essential services in a struggling economy. President Tinubu suspended the tax in July 2023, citing its potential to worsen inflation and impede access to digital services.
Fast forward to 2025, and the industry still isn’t buying it. As of August 2024, telecom operators reportedly paid 54 different taxes, according to the Association of Licensed Telecom Operators of Nigeria (ALTON). With the sector only just rebounding from currency devaluation and rising operational costs, operators fear the reintroduction of the excise duty could choke recovery efforts and slow digital inclusion.
“We’ve had no clarity on how the 5% tax would be implemented, but the burden will fall on the consumer,” said Gbenga Adebayo, President of ALTON, which represents major players like MTN Nigeria, Airtel Nigeria, Globacom, and 9mobile. “Telecoms should be treated as a social good, not taxed like luxury items. No one taxes telecoms like this in countries where infrastructure is taken seriously.”
Industry stakeholders argue that excise taxes are typically reserved for luxury or harmful goods such as designer watches, luxury cars, alcohol, or tobacco, whose consumption governments might want to curb. Internet access, they say, hardly belongs in that category.
An excise duty, however, is a specific type of tax that is levied on certain goods or services at the time of their purchase. The Nigerian Tax Bill describes excisable transactions as “transactions which take place— (a) physically in Nigeria, the excisable transaction is the provision of the service; and (b) remotely or virtually, the excisable transaction is the receipt or consumption of the service in Nigeria.”
That means both domestic and international service providers offering telecom services in Nigeria would be liable to collect and remit the 5% tax, passing the cost on to the customers.
“There’s no wiggle room for operators to absorb this cost,” said Anthony Emoekpere, President of the Association of Telecommunications Companies of Nigeria (ATCON). “Operators are already working with a tariff increase that fell short of what they need. The new tax will squeeze margins and hit consumers the hardest.”
Nnenna Ukoha, Head of Public Affairs at the Nigerian Communications Commission (NCC), told TechCabal that the regulator has not yet received the official version of the bill for review.
Meanwhile, the bill does include some reliefs: 0% VAT on essential goods and services like food, healthcare, education, rent, public transport, and renewable energy. These categories, according to Presidential Fiscal Policy and Tax Reforms Committee Chair Taiwo Oyedele, make up around 82% of average household consumption, and close to 100% for low-income households.
Still, the telecom sector, which recently implemented a 50% tariff increase on its services, remains uneasy. The timing of the bill is especially delicate, coming just as major players like MTN Nigeria and Airtel Africa are bouncing back financially. MTN posted a ₦133.7 billion ($83.1 million) profit after tax in Q1 2025, reversing a ₦392.7 billion ($244.06 million) loss in 2024. Airtel Africa reported $661 million in pre-tax profit for the year ending March 2025. These gains are a result of higher data usage, tariff hikes, and ongoing infrastructure investments.
“The government should not be so extractive of the average Nigerian,” said ALTON’s Adebayo. “Someone recharging ₦1,000 will feel this 5% tax the most. It also places an additional compliance burden on operators to collect and remit the tax.”
They argue that short-term tax revenue shouldn’t come at the cost of long-term growth. As the bill awaits harmonisation between the Senate and House of Representatives before it is forwarded to the President for assent, all eyes remain on whether the Tinubu administration will heed the telecom industry’s calls or press ahead with its broader fiscal ambitions.
