President Bola Tinubu has permanently scrapped the 5% excise duty on telecommunications services, a move set to ease financial pressures on consumers and businesses in Nigeria’s digital economy. The announcement was made by the Executive Vice-Chairman of the Nigerian Communications Commission (NCC), Dr. Aminu Maida.
Background of the Excise Duty
The controversial levy was introduced under the 2020 Finance Act during the previous administration as a revenue-generating measure. From the outset, it faced resistance from industry stakeholders and the public, who argued that it would increase service costs and burden consumers. In July 2023, the duty was suspended as part of President Tinubu’s fiscal policy reforms designed to eliminate overlapping and onerous taxes. However, the National Assembly proposed reinstating it in October 2024, prompting renewed pushback from industry players.
Impact on the Telecom Sector
The removal of the excise duty is expected to drive access, innovation, and investment in the telecom industry. Dr. Maida emphasized that the decision underscores the President’s commitment to easing financial strain on Nigerians while positioning the sector for stronger growth. As a vital enabler of economic activity and digital inclusion, Nigeria’s telecom industry stands to benefit substantially from this policy shift. The NCC has pledged to continue engaging stakeholders to ensure that consumers enjoy the full benefits of the reform.
Benefits for Consumers
For consumers, the removal of the duty translates into more affordable and accessible telecom services. With over 220 million active telephone lines and rising internet penetration, this policy is expected to accelerate digital inclusion and contribute to broader economic development.
NCC’s Regulatory Initiatives
To complement the reform, the NCC is advancing regulatory initiatives focused on transparency, accountability, and consumer protection. These include:
- Public Map of Network Performance: Launching in September, this map will display independent data on download speeds, latency, and other quality indicators.
- Quarterly Network Performance Reports: Regular reports on service quality, based on user data, will be published.
- Behavioral Economics in Regulation: By applying behavioral insights, the NCC aims to ensure clearer information is available to both consumers and operators for better decision-making.
Industry Reaction
The Association of Telecommunications Companies of Nigeria (ATCON) strongly opposed the proposed reinstatement of the duty, warning it would erode affordability, deter investment, and hinder digital inclusion. The decision to abolish the levy has therefore been widely welcomed as a pro-people reform consistent with the government’s pledge to create a more business-friendly environment.
Conclusion
The elimination of the 5% telecoms excise duty marks a milestone in Nigeria’s telecommunications sector. The move is expected to spur growth, attract investment, and strengthen digital inclusion efforts. With supportive regulatory initiatives, the NCC is well-positioned to ensure transparency and protect consumer interests as the industry enters a new phase of expansion.
