Telecom subscribers in Nigeria may soon face a 5% hike in charges for data and voice services if the Nigeria Tax Bill 2024 is enacted. The bill, which reintroduces a contentious 5% excise tax on telecom services, was passed by the Senate on May 8, 2025. Industry stakeholders have expressed concern that this move would ultimately shift the financial burden onto consumers and hinder Nigeria’s ongoing efforts to expand digital access across the country.
Originally introduced under the Finance Act of 2020 during former President Muhammadu Buhari’s administration, the 5% excise duty was aimed at broadening the scope of goods and services subjected to excise taxation. However, it was met with strong opposition from telecom operators and consumer rights groups, who argued that it would make essential telecom services more expensive in an already fragile economy. In response to these concerns, President Tinubu suspended the tax in July 2023, citing fears that it could exacerbate inflation and obstruct access to digital tools and services.
Now, in 2025, the telecom industry remains unconvinced. As of August 2024, operators were reportedly contending with 54 different taxes, according to the Association of Licensed Telecom Operators of Nigeria (ALTON). Having only recently begun recovering from the impact of currency devaluation and rising operational expenses, telecom providers warn that reinstating the excise duty could derail recovery efforts and severely undermine the nation’s digital inclusion agenda.
We still don’t have any clarity on how the 5% tax will be implemented, but it’s clear the burden will ultimately fall on the consumer,” said Gbenga Adebayo, President of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), which represents major players like MTN Nigeria, Airtel Nigeria, Globacom, and 9mobile. “Telecommunications should be treated as a social good—not taxed like luxury items. In countries where infrastructure development is a priority, telecoms aren’t taxed this way.”
Industry stakeholders argue that excise duties are typically applied to luxury or harmful goods—such as designer watches, luxury vehicles, alcohol, or tobacco—where governments aim to discourage consumption. In contrast, internet access, they maintain, doesn’t belong in that category.
Excise duty refers to a specific kind of tax levied on particular goods or services at the point of purchase. According to the Nigerian Tax Bill, excisable transactions are defined 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.”
This means both local and foreign service providers delivering telecom services within Nigeria will be required to collect and remit the 5% tax—an expense that will ultimately be transferred to customers.
“There’s no room for operators to absorb this cost,” said Anthony Emoekpere, President of the Association of Telecommunications Companies of Nigeria (ATCON). “Operators are already working under a tariff increase that doesn’t fully meet their financial needs. The new tax will only tighten margins and impact consumers the most.”
According to Nnenna Ukoha, Head of Public Affairs at the Nigerian Communications Commission (NCC), the regulator has not yet received the final version of the bill for review.
However, the bill includes some reliefs: a 0% Value Added Tax (VAT) on essential goods and services such as food, healthcare, education, rent, public transportation, and renewable energy. These categories, according to Taiwo Oyedele, Chair of the Presidential Fiscal Policy and Tax Reforms Committee, account for roughly 82% of average household consumption—and close to 100% for low-income households.
Nonetheless, the telecom industry remains unsettled—especially after recently enacting a 50% tariff hike on services. The timing of the bill is particularly sensitive, as leading providers like MTN Nigeria and Airtel Africa are only just starting to recover financially. MTN reported a ₦133.7 billion ($83.1 million) profit after tax in Q1 2025, bouncing back from a ₦392.7 billion ($244.06 million) loss in 2024. Similarly, Airtel Africa announced a $661 million pre-tax profit for the financial year ending March 2025—driven by increased data usage, tariff adjustments, and continued infrastructure investments.
“The government should avoid being overly extractive toward the average Nigerian,” Adebayo said. “Someone recharging ₦1,000 will feel the 5% tax most acutely. It also imposes an additional compliance burden on operators, who must now collect and remit the tax.”
Industry leaders argue that chasing short-term tax revenue shouldn’t come at the cost of long-term economic growth. As the bill now awaits harmonisation between the Senate and the House of Representatives before heading to the President for assent, all eyes are on whether the Tinubu administration will heed the telecom sector’s concerns—or move forward with its broader fiscal agenda.
