*The Federal Government introduces a new bill proposing 5 percent Excise Duty on telecommunications, gaming, and betting services as part of a broader effort at overhauling the country鈥檚 tax framework, as well as increasing non-oil revenue in the Nigerian economy

Isola Moses | 绿帽献妻

As part of the Nigerian authorities鈥� broader strategy to boost non-oil revenue amid growing fiscal pressures in the economy, the Federal Government has introduced a new bill proposing 5 percent Excise Duty on telecommunications, gaming, and betting services as part of a broader effort to overhaul the nation鈥檚 tax framework.

绿帽献妻 reports the fresh proposal is contained in the 鈥淣igeria Tax Act鈥�, which aims to impose Excise Duty on various services across the country.

The bill, titled 鈥淎 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鈥� and dated October 4, 2024, is in National Assembly (NASS), in Abuja, FCT.

The proposed tax on telecoms, gaming and betting services

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 (NCC).

This duty will also apply to gaming, gambling, lotteries, and betting activities in Nigeria.

According to the document, 鈥淪ervices, including telecoms, 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.鈥�

This means that all transactions linked to these services will attract the excise duty once the bill is enacted.

Objectives of 5 percent Excise Duty on telecoms, others

As Nigeria鈥檚 telecoms and betting sectors are fast expanding in the Nigerian economy, authorities see this bill as a way to widen the country鈥檚 revenue base.

It is equally noted that through implementation of excise duties on major sectors, including telecommunications and betting, the Nigerian Government aims to mitigate revenue challenges and improve the regulation of currency exchanges.

The new bill, if passed into law, will significantly impact the cost of telecoms 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.

On regulations and currency transactions

The proposed bill also 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 stated: 鈥淲here an exchange of currency transaction involving the Naira is conducted within or outside Nigeria 鈥� (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.鈥�

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