FG Mulls Excise Tax on Telecoms Airtime Charges

Nigeria is considering introducing an excise tax on telecoms airtime charges, Ben Akabueze, budget director said on Tuesday at a World Bank event where the need for the government to raise additional revenues was discussed.

“Last year, we found that 51 countries in Africa have excise on airtime charges, so we are looking at that as well as an area (to tax),” said Akabueze, director-general of the Budget Office of the Federation.

Recall that Nigerians had fought similar moves in 2019 by the federal government to introduce so-called communications tax bill

The Bill has sought to impose and collect communication services tax (CST or levy) on charges payable by consumers of electronic communication services in Nigeria (excluding private electronic communication services) at the rate of 9%.

Key highlights of the Bill are :

Electronic communication services subject to the levy include: voice calls, SMS, MMS, data usage (both from Telecommunication Services Providers and Internet Service Providers), Pay per View TV Stations etc.

The tax is to be paid together with the electronic communication service charge payable to the service provider by the user of the service.

The tax is payable whether or not the person making the supply is permitted or authorized to provide electronic communications services.

All service providers are expected to file monthly returns not later than the last working day of the month immediately after the month to which the tax returns and payment relate.

Penalty for failure to file returns on or before the due date is N50,000 and an additional N10,000 for each day the returns are not submitted, among others.