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The Federal Government of Nigeria, under the administration of President Bola Ahmed Tinubu, has removed the excise duty of 5% formerly placed on telecom services. The removal of this telecom tax is for the purpose of relieving millions of Nigerians of high cost of data and airtime.
According to Aminu Maida—the Executive Vice Chairman of the Nigerian Communications Commission (NCC) who confirmed the policy reversal—noted that the move is projected to ease the burden on more than 171 million active telecom subscribers nationwide, many of whom have already been hit by a 50% hike in tariffs earlier this year.
Maida confirmed that President Bola Tinubu ordered the removal of the excise duty on telecommunications services during discussions on the Finance Act.
Buhari's Administration Implemented The 5% Tax
If you can recall, the 5% tax was imposed three years ago under the administration of former President Muhammad Buhari's administration as an effort to diversify and increase revenue beyond oil for the government. The 5% tax covered both telecom's voice and data services, and government mandated telecom companies to remit the tax on or before the 21st of every month.
The Burdens on Subscribers
From the start, telecom operators strongly opposed the new tax; they warned that it would worsen pressure on an industry already dealing with more than 39 different taxes, VAT, and mandatory contributions.
They also pointed to soaring costs, especially from running base stations on diesel due to unreliable electricity. Operators argued they could not absorb the levy and would shift the burden to subscribers, raising the effective tax on telecom services to about 12.5%.
In addition to the levy, NCC approved a 50% tariff increase effective January 2025. Operators like MTN Nigeria had pushed for 100% increase in Airtime and Data. They cited inflation, high fuel and energy prices, foreign exchange shortages, and rising equipment costs as the causes of the service increase.
However, NCC settled on a compromise. This adjustment immediately reflected in higher prices for data and SMS, with common data plans and text message rates climbing sharply. For consumers, the impact has been direct and painful. The average cost of 1GB of data jumped from about N287 to N431. This is definitely beyond household budgets.
Final Notes
What NIgerians know that used to be a stable monthly expense has now become another source of pressure that forces many—especially below average-income individuals—to minimize their data expenses, downgrade to cheaper plans, and limit non-essential internet use.
This Tinubu reversal of the 5% tax policy might as well reduce data and airtime price in Nigeria. Now, we should be waiting to hear back from NCC and the major telecommunication companies in Nigeria to reduce their service fees. What do you think about this? Let's know your opinions in the comments section.
