In a move that could significantly reduce the cost of communication for Nigerians, the Federal Government has scrapped the 5% excise duty on telecommunications services, which covered both voice calls and data usage.
The announcement came through the National Orientation Agency (NOA) on Thursday, which relayed remarks from Dr. Aminu Maida, the Executive Vice Chairman of the Nigerian Communications Commission (NCC).
Maida disclosed that President Bola Ahmed Tinubu ordered the removal of the telecom tax during discussions surrounding the recently passed Finance Act.
According to him, the decision was driven by Tinubu’s commitment to ease the cost burden on millions of Nigerians at a time when inflation and rising utility tariffs are straining household incomes.
Relief for Over 171 Million Subscribers
Nigeria currently has more than 171 million active telecom subscribers who rely on their mobile devices daily for business, education, social interactions, and access to digital services.
“The removal of the 5% tax is expected to bring immediate relief to users across the country,” Maida said, emphasizing that the measure aligns with Tinubu’s broader push to support the digital economy and prevent “additional financial strain on citizens.”
This comes at a time when Nigerians have already endured a 50% tariff hike earlier in 2025, a move that hit low-income earners especially hard.
A Controversial Tax Since Day One
The 5% excise duty on telecom services was first introduced in 2022 under former President Muhammadu Buhari.
At the time, the Ministry of Finance defended the move as necessary to boost revenue generation amid dwindling oil earnings, Nigeria’s traditional economic backbone. Officials argued that such levies were “in line with global taxation practices.”
But from the very beginning, the policy sparked widespread backlash.
Telecom operators, under the Association of Licensed Telecom Operators of Nigeria (ALTON), warned that the levy would be counterproductive.
Consumer rights groups insisted the tax was unfair, saying Nigerians already carried one of the heaviest telecom tax burdens in sub-Saharan Africa.
Analysts also pointed out that Nigeria’s high poverty rate, coupled with inflation, meant additional charges on data and calls would only deepen digital inequality.
How the 5% Levy Worked
Under the tax regime, every voice call and data subscription attracted an extra 5% excise duty.
For instance:
A ₦1,000 data plan became ₦1,050.
A ₦200 call credit rose to ₦210.
Though seemingly small per transaction, for heavy users and businesses, the costs added up over time.
Worse, telecom companies often adjusted their pricing structures to absorb compliance costs, resulting in even higher tariffs for end-users.
Why Tinubu Moved to Scrap the Tax
Since assuming office in May 2023, President Tinubu has launched a series of reforms targeting economic stabilization and cost relief.
While his controversial fuel subsidy removal in 2023 triggered initial hardship, Tinubu has repeatedly stressed that his administration would also work to cut unnecessary burdens.
The removal of the telecom levy is consistent with this approach. According to policy insiders, three main reasons drove the decision:
Consumer Protection: Nigerians have faced relentless increases in the cost of food, transport, and housing. Eliminating telecom taxes was a way to cushion households.
Digital Inclusion: Affordable data is crucial for education, fintech, remote work, and innovation. The tax was seen as a barrier to Nigeria’s digital growth.
Investor Confidence: By easing sectoral taxation, Tinubu signals to telecom operators and global investors that Nigeria is serious about creating a business-friendly digital economy.
Industry Reactions
The telecom industry has welcomed the government’s reversal.
The Association of Licensed Telecom Operators of Nigeria (ALTON) released a statement describing the move as “a step in the right direction,” adding that it would “strengthen consumer trust and expand digital penetration.”
Consumer advocacy groups such as Enough is Enough (EiE Nigeria) hailed the policy as a “victory for the average Nigerian.”
However, experts caution that unless the government reduces multiple overlapping taxes across the ICT sector, the relief might be short-lived.
Currently, telecom operators face over 39 different taxes and levies across federal, state, and local government levels, from Right of Way fees to regulatory charges.
What This Means for Your Phone Bill
So, what does this mean for everyday Nigerians?
Slightly Lower Tariffs: Call and data plans are expected to drop by 5%, reversing the earlier excise charge.
No New Hidden Charges: The NCC has pledged to monitor operators to ensure the relief is passed on to customers and not absorbed as corporate profit.
Better Digital Access: Lower data costs could boost internet penetration beyond the current 46% penetration rate, especially in rural areas.
Global Comparison
Nigeria is not the only country that has experimented with telecom levies.
Uganda once imposed a social media tax but had to reverse it after it led to decreased internet usage and widespread protests.
Kenya maintains a VAT on telecom services, but unlike Nigeria, it has offset the burden with cheaper infrastructure rollout.
Nigeria’s repeal of the telecom excise duty places it among countries recognizing that digital growth should be encouraged, not taxed excessively.
Looking Ahead: The Digital Economy Push
Nigeria’s telecom sector contributes about 15% to the nation’s GDP. As such, affordability is key to sustaining growth.
The scrapping of the telecom levy sends a positive signal ahead of Nigeria’s 2026 general elections, where economic hardship is expected to dominate political debates.
It also aligns with the government’s National Digital Economy Policy (2020–2030), which envisions Nigeria as a global leader in digital services and innovation.
However, experts argue that for real progress, the government must also:
Expand broadband infrastructure nationwide.
Cut red tape and multiple taxation at state levels.
Encourage local production of smartphones and devices to reduce import costs.
Final Take
The revocation of the 5% telecom tax marks a rare piece of good news for Nigerian consumers, offering much-needed relief in an economy under strain.
But more importantly, it reflects a policy shift: instead of squeezing citizens for short-term revenue, the government appears ready to bet on long-term digital growth as a driver of prosperity.
For now, mobile users can expect slightly cheaper data and calls — a welcome reprieve in a country where staying connected is no longer a luxury, but a necessity.
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