On 5 September 2022, Nigerian Minister of Communications and Digital Economy Isa Pantami reportedly announced that the government would suspend a 5% telecommunications tax that was set to be implemented in 2023.
The telecommunications tax was initially proposed by the Minister of Finance and the Nigerian Customs Service to reduce Nigeria’s national budget shortfall. In 2019, Nigeria had one of the lowest tax-to-gross domestic product ratios in the world at 6%. The new tax would have increased government income and consequently increased the costs of operation in the mobile industry. The telecommunications tax may have made a large contribution to the fiscus, with telecommunications firms in Nigeria such as MTN and Airtel collectively recording USD 7.8 billion in revenue in 2021.
Minister Pantami reportedly stated that the tax was suspended out of concern that it would raise communications costs and exacerbate digital inequalities in the country. The tax would have been applied in addition to an existing 7.5% value-added tax on voice calls, text messages and data services. The Minister will convene a committee of government and industry stakeholders to review the proposed tax and make further recommendations to President Muhammadu Buhari.
Several African countries have adopted telecommunications taxes in recent years, including Ghana and Uganda in 2021.
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