FG Abolishes 5% Telecom Tax on Voice & Data Services — A Detailed Explainer

Editor’s Note: This article was originally written on September 18, 2025 and is being republished here for archival purposes.

What happened

The Federal Government of Nigeria has completely removed the 5% excise duty on telecommunications services (voice calls and data) that was previously enshrined in the law but suspended. The removal was made official in 2025 under the new tax law, following directives by President Bola Tinubu. The Nigerian Communications Commission (NCC), via its Vice Chairman Dr. Aminu Maida, confirmed that the President ordered the removal during discussion of the Finance Act.

Policy Origins & Suspension

The 5% excise duty was originally introduced via the Finance Act 2020, under the Buhari administration, as part of efforts to raise non-oil revenue. It covered mobile voice calls, fixed line voice service, internet/data services.

Before its full implementation, the tax was suspended in July 2023 by President Tinubu through executive orders (as part of easing burden on subscribers and businesses).

There were proposals to reintroduce the tax (for example in the 2024 Tax Bill), which were met with resistance from telecom operators and consumer groups.

What the Removal Means (and What It Doesn’t)

What it means:

1. Legal/Regulatory Change
   The excise duty is no longer in effect under the revised national tax laws; it is permanently removed—not merely suspended.
2. Relief for Subscribers
   The move is projected to benefit over 171 million active telecom users in Nigeria. Many of these users had already felt the pinch from other increases (tariffs, inflation, operating costs).
3. Support for the Digital Economy
   The government frames the removal as part of its strategy to reduce cost burdens for businesses and households, enhance affordability of digital services, and promote greater internet and voice service penetration.

What it doesn’t guarantee (or caveats):

• Automatic Price Drops
  Even though the excise duty is removed, there is no guarantee all telecom operators will lower their prices immediately by the equivalent amount. Some reports note that the excise duty had not always been in full collection mode; in many cases costs had already been passed on or threatened, but full implementation was delayed. Thus, subscribers might not see a proportional decline in cost.
• Other Taxes & Costs Remain
  The telecom sector still faces multiple other levies (VAT, other excise duties, energy/fuel costs, foreign exchange fluctuations, regulatory fees). Removal of one tax helps, but doesn’t solve the broader cost-pressure situation.

Stakeholder Reactions

• Telecom Operators (e.g. ALTON, ATCON) welcomed the decision as a needed relief to consumers and the industry. They had previously argued that the excise duty would exacerbate already high operational costs.
• Consumer Advocacy & Subscriber Groups also saw it as positive, especially those who had complained about rising costs for data, calls, and overall telecom bills.
• Government Officials & Regulators emphasized that the removal shows responsiveness to public concerns and is aligned with policy aims to make digital communication more affordable and support growth in Nigeria’s digital economy.

Economic & Fiscal Implications

• For Government Revenue: Removing this excise duty means a reduction in non-oil tax revenue. The government must balance this with either cuts in spending or adjustments elsewhere. The level of lost revenue depends on how much was likely being collected under this duty.
• For Inflation & Consumer Welfare: The excise duty removal may help ease inflationary pressures for telecom services, which are a significant part of many Nigerians’ monthly budgets. Lower telecom costs could free resources for other needs.
• Digital Inclusion & Growth: Telecom services underpin many sectors—education (online learning), finance (mobile money, transfers), commerce (e-commerce, logistics), public services (information access). More affordable access boosts usage, which can support job creation and economic growth.

What’s Next & Key Questions

• Will telecom providers reduce tariffs or data prices commensurately, and how soon?
• How will the government make up for revenue previously expected from the excise duty? Will alternative taxes be introduced or other leaks in the tax system closed?
• How will this decision affect investment in telecom infrastructure, particularly for lower-income, rural areas, where cost barriers have been more acute?
• Will the removal of this excise duty become part of broader reforms to reduce multiple taxation in the sector?

Conclusion

The permanent removal of the 5% excise duty on voice and data services is a policy shift likely to bring relief to many Nigerian consumers and aligns with goals for more affordable digital access. While it is a win for telecom users and the industry, its full benefits will depend on how and when operators adjust their pricing, how the government compensates the revenue gap, and whether this forms part of deeper reforms to ease cost burdens across the telecoms sector.

References

• Nairametrics, “FG removes 5% telecom tax on voice, data services” — Rosalia Ozibo, 11 September 2025.
• Business Post Nigeria, “FG Removes 5% Telecoms Tax After Two-Year Suspension” — Adedapo Adesanya, 11 September 2025.
• Vanguard, “FG scraps 5% telecom tax on voice, data services”, 11 September 2025.
• The Nation Online, “Federal Government cancels 5% telecom tax on data, voice services” — Ntakobong Otongaran, 12 September 2025.
• ICIR Nigeria, “Tinubu scraps 5% telecoms tax on voice, data services — NCC”, 20 August 2025.
• ThisDayLive, “FG Moves to Begin Implementation of 5% Excise Duty on Telecom Services”, 2022.
• Vanguard, “Telecom firms reject proposed reintroduction of 5% excise duty”, October 2024.