Nigeria suspends plan for 5% tax on telecoms despite revenue crunch

PUBLISHED: Tue, 06 Sep 2022 16:39:52 GMT
Felix Onuah
Branded booths retailing mobile phones and telecoms items inside Awolowo glass house in Lagos, Nigeria, on Monday, March 29, 2021. Nigerians are having to contend with the highest inflation rate in four years, the second-highest unemployment rate on a list of 82 countries tracked by Bloomberg, and an economy thats only just emerged from recession. Photographer: Adetona Omokanye/Bloomberg via Getty Images

ABUJA, Sept 6 (Reuters) – Nigeria has suspended plans to add a 5% excise duty on telecommunications services, saying the sector is already overburdened with taxes.

The move comes despite the need for new revenue streams in a country facing rising debt servicing costs, crushing fuel subsidies and a plunge in oil exports due to underinvestment and industrial-scale theft.

Isa Pantami, communications and digital economy minister, said in a statement that the potential tax could “impact very negatively” on the digital economy and was on hold until a committee could review it.

The statement said the sector already faced 41 different categories of tax, some of them duplications from multiple tiers of government.

Experts say Nigeria is not generating enough revenue despite growing spending, which is forcing the nation to continue borrowing to repay debt.

Nigeria spent $4.7 billion in the first four months of the year to service its debt, a higher figure than public revenue, and expects to spend 6.31 trillion naira ($15.1 billion) on servicing domestic and foreign debt next year. Read full story

(Reporting By Felix Onuah; Writing by Libby George; Editing by Jan Harvey)

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