Federal government may reintroduce the controversial telecom tax and other fiscal measures to fulfill one of the conditions for The World Bank’s fresh $750 million loan to Nigeria.
Experts have however strongly opposed new taxes, calling them harmful to the sector’s survival and the larger economy.
But The World Bank in programme appraisal document, dated May 17, 2024, on the loan disbursement to Nigeria, said that $750 million loan to Nigeria will support the federal government’s policy reforms.
A copy of the plan’s document posted on the World Bank website indicated that the government might reintroduce the excises on telecom services, and EMT levy on electronic money transfers through the Nigerian Banking System among other taxes.
Recall that on June 13, Wale Edun, minister of finance and coordinating minister of the economy, announced the approval of two financial support packages by the World Bank valued at $2.25 billion.
The loan consists of $1.5 billion for Nigeria’s reforms for economic stabilisation to enable transformation (RESET) development policy financing program (DPF) and $750 million for Nigeria’s accelerating resource mobilisation reforms (ARMOR) program-for-results (PforR).
In the programme appraisal document, the World Bank said the ARMOR programme contains revenue policy measures such as raising pro-health taxes on tobacco, and alcohol.
The Bretton Woods institution also said the programme contains the introduction of taxes on online betting and gambling, as well as new excise on telecommunication services.
Experts have however warned that these taxes would have severe consequences for investment and the operational viability of telecom companies.
According to them, higher taxes would hinder digitalization efforts, which are crucial for economic growth.
The proposed tax measures, according to the industry, are not only damaging to the telecom sector but also to the broader economy.
