NIGERIA’S economy remains in a precarious state, and the path to recovery requires careful nurturing rather than additional burdens on businesses and citizens. Therefore, the revival of the 5.0 per cent excise duty on telecom services by the Senate, as part of the Nigeria Tax Bill 2024, is ill-timed and insensitive, given the current economic hardships Nigerians face.
This government must curtail its penchant for focusing on revenue generation at the expense of citizens.
Indeed, poverty in Nigeria is worsening. The World Bank projects a rise of 3.6 percentage points by 2027. This makes Nigeria one of the few resource-rich countries in sub-Saharan Africa where poverty is expected to increase.
PwC estimates that 13 million more Nigerians could be impoverished in 2025 due to high inflation, rising interest rates, and a weakening naira. Currently, over half of Nigerians live below the poverty line, struggling to afford basic needs.
Unfortunately, the Federal Government seems to continue to pursue policies that could drive more Nigerians into poverty.
President Bola Tinubu suspended the tax in July 2023, citing concerns that it could exacerbate inflation and hinder access to digital services, especially for low-income Nigerians. The reasons adduced for suspending the tax are still true today.
This dire situation is exacerbated by soaring costs of essentials. The price of cooking a pot of jollof rice has surged by 19 per cent to N25,486 between September 2025 and March 2025 per SBM Intelligence. This reflects the linkage between rising food prices and the deepening poverty crisis.
Inflation remains stubbornly high at 23.71 per cent, barely easing from previous months, and core inflation stands at 23.39 per cent, signalling persistent price pressures on everyday goods and services.
Therefore, the decision to reinstate the 5.0 per cent telecom tax is unhelpful. Telecom operators have already been allowed to increase tariffs by about 40-50 per cent, with data and call costs rising sharply since early 2025.
Adding a new tax will further inflate prices for consumers, many of whom are already grappling with reduced purchasing power amid the cost-of-living crisis. This additional tax threatens to deepen the financial strain on Nigerians and hinder efforts to promote digital inclusion, which is vital for economic participation.
Yet, while lawmakers continue to approve measures that increase the tax burden on citizens, they enjoy generous allowances and perks. For them, it is still business as usual, while they have totally abandoned their role of checking the excesses of the executive.
Instead of taxing hapless Nigerians excessively, the government must practice fiscal restraint by streamlining its structure and eliminating unnecessary MDAs to conserve resources.
The telecom sector, which contributed 14.4 per cent to Nigeria’s GDP in 2024 and is a driver of connectivity for over 160 million subscribers, should be supported rather than taxed further.
Telecom operators contend with 48 different taxes and rates per the Association of Licensed Telecom Operators of Nigeria, despite their huge investment outlays.
As of 2021, Nigeria’s telecommunications sector has attracted a cumulative investment of approximately $75.6 billion, encompassing foreign direct investment and local capital.
MTN, Mafab Communications, and Airtel paid $863.9 million for 5G licences between 2022 and 2023, yet they face multiple taxation challenges that complicate business operations.
Nigerians can ill afford the imposition of additional taxes like the 5.0 per cent excise duty under the prevailing circumstances. This is counterproductive, it risks pushing more citizens into further hardship and undermining economic recovery efforts.
The government should explore alternative strategies to stabilise the economy by retooling the agriculture sector, improving security, and providing better support to the manufacturing and MSME sectors while addressing infrastructure challenges.
Tinubu should know that Nigerians need respite, not additional burdens.
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Instead of taxing hapless Nigerians excessively, the government must practice fiscal restraint by streamlining its structure and eliminating unnecessary MDAs to conserve resources.
