Pannick in Nigeria As Tinubu Prepares to Launch Telco Tax, After Cybersecurity Levy

Telco tax may follow the Cybersecurity levy by the Central Bank of Nigeria on Monday, May 6, 2023.

ENigeria News reports that President Tinubu is considering reviving the previously suspended telecom taxes and other fiscal measures, the move we understand is geared towards helping to secure a $750 million World Bank loan for Nigeria.

A document from the Stakeholder Engagement Plan for Nigeria – Accelerating Resource Mobilisation Reforms program between Nigeria and the World Bank revealed the potential reintroduction of taxes on telecom services and electronic money transfers.

The suspension of the five percent excise duty on telecommunications and the Import Tax Adjustment levy on certain vehicles, ordered by President Bola Tinubu in July 2023, could be lifted to meet the targets for the new loan, with negotiations underway between the government and the World Bank.

The program aims to bolster the government’s financial standing by improving its capacity to manage and mobilize domestic resources effectively, including enhancing tax and customs compliance and safeguarding oil revenues.

Under the ARMOR program, planned tax reforms are expected to impact various economic sectors significantly.

This initiative, part of a larger governmental effort running from 2024 to 2028, aims to reform tax and excise regimes, enhance the administrative capabilities of tax and customs, and ensure transparency in oil and gas revenue management.

The World Bank’s contribution of $750 million forms a substantial portion of the program’s budget, with the government expected to chip in $1.17 billion annually.

Stakeholders likely to be affected include manufacturers of goods such as alcoholic beverages, tobacco products, and sugar-sweetened beverages, as well as telecom and banking service providers, importers, and international traders.
The development has triggered some panic across the country, even as Nigerians battle an already existing high cost of living.

Source: ENigeria Newspaper