The Federal Government has unveiled a plan to impose a five percent tax on certain services provided in the country.
This is contained in a new bill aimed at overhauling Nigeria’s tax framework
The proposed legislation, dated October 4, 2024, seeks to introduce excise duties on telecommunications services, gaming, gambling, lotteries, and betting.
According to the bill, “The amount of an excisable transaction is the amount chargeable for the service by the service provider, both in money or money’s worth.”
Additionally, it states that these services “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.”
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A breakdown of the excise duty structure reveals that telecoms services, including postpaid and prepaid services regulated by the Nigerian Communications Commission, will attract a five percent duty.
This move is part of the government’s strategy to boost non-oil revenue amidst fiscal pressures, leveraging the rapid growth in the telecoms and betting sectors to widen the revenue base.
The bill also introduces guidelines on currency transactions, specifying that any difference between the prevailing Central Bank of Nigeria (CBN) exchange rate and the actual transaction rate will be subject to excise duty.
This aims to ensure that currency exchanges align with official CBN rates, with any excess payable as excise duty under a self-assessment model.
