The National Assembly (NASS) has suggested implementing a 5% excise tax on telecommunications, gaming, betting, and lottery activities in the country, despite a previous exemption given by former President Muhammadu Buhari.
On July 6, 2023, President Bola Tinubu signed four executive orders, one of which halted the 5 percent excise tax on telecommunication services in order to lessen the negative impacts of tax hikes on businesses and households.
However, a new executive bill called the ‘Nigeria Tax Bill 2024’ aims to reintroduce this excise duty.
Under the proposed bill, the taxable transaction amount will be determined based on the service provider’s fee, whether in monetary terms or equivalent value.
The bill states: “Services, including telecommunications, gaming, gambling, betting, and lotteries, however, described, provided in Nigeria, shall be subject to excise duties at rates specified under the Tenth Schedule to this Act, in a manner prescribed by the Service.”
Furthermore, the bill addresses currency exchange transactions involving the naira, specifying that such transactions should not surpass the prevailing exchange rate at the official market, as authorized by the Central Bank of Nigeria, CBN.
In cases where the exchange rate of a transaction exceeds the official market rate, the excess amount will be payable as excise duty by the seller, assessed on a self-assessment basis under the Nigeria Tax Administration Act.
