Nigeria may re-introduce telecom tax in order to obtain new $750 million World Bank loan - Uju Ayalogu's Blog for News, Reviews, Articles and More

Breaking News

Post Top Ad

Monday 6 May 2024

Nigeria may re-introduce telecom tax in order to obtain new $750 million World Bank loan

Nigeria may re-introduce telecom tax in order to obtain new $750 million World Bank loan

Nigeria may re-introduce telecom tax in order to obtain new $750 million World Bank loan 

Nigeria may reinstate a previously suspended telecom tax and other fiscal measures as it seeks to secure a new $750 million loan from the World Bank. 

This is according to the Stakeholder Engagement Plan for Nigeria – Accelerating Resource Mobilisation Reforms (ARMOR) P-For-R (P177308) program dated March 2024, between Nigeria and the World Bank.

A copy of the plan’s document was obtained and seen by Nairametrics suggest the government reintroduces the excises on telecom services, EMT levy on electronic money transfers through the Nigerian Banking System among other taxes.

President Bola Tinubu in July 2023 ordered the suspension of the 5% excise duty on telecommunications and the Import Tax Adjustment levy on certain vehicles. 

However, it appears that this suspension may be lifted to meet the program targets for a new, yet-to-be-approved World Bank loan.

Nairametrics has confirmed that negotiations are ongoing between the Federal Government and the World Bank.

The program’s development objective is to strengthen the government’s financial position by enhancing its capacity to manage and mobilize domestic resources effectively, which includes improving tax and customs compliance and protecting oil revenues.

Affected stakeholders and sectors


The planned tax reforms under the ARMOR program are expected to have significant implications across various economic sectors. 

According to the plan, affected stakeholders will include manufacturers of goods such as alcoholic beverages, tobacco products, and sugar-sweetened beverages (SSBs), telecom and banking service providers, as well as the general tax-paying public. 

Importers and international traders will also feel the impact of these new fiscal policies. 

Key industry groups such as the Association of Licensed Telecom Operators of Nigeria (ALTON) are engaged regarding the excise duties on telecom services. 

The banking sector, represented by the Committee of Bankers, are engaged regarding the introduction of an Electronic Money Transfer (EMT) levy on transactions processed through Nigerian banks. 

Additionally, the Manufacturers Association of Nigeria (MAN) will play a crucial role, particularly for those involved in producing targeted products such as tobacco and alcoholic beverages. 

The plan document read: 

“Domestic Revenue Mobilisation drive in the government ARMOR program seeks to increase revenue on some targeted industries and sectors of the economy. Specific groups and agencies within affected sectors include 

“1. Association of Licensed Telecom Operators of Nigeria: The introduction of excises on telecom services requires that all telcos are mobilised to fully participate in the collection of such revenue. 

“2. Committee of Bankers: Introduction of EMT levy on electronic money transfers through the Nigerian Banking System would need the buy-in all banking institutions 

“3. Manufacturer’s Association of Nigeria: Manufacturers of tobacco products, sugar sweetened beverages(SSBs) and alcoholic beverages who would be required to collect excises on their products are critical stakeholders for the introduction of the new excise regime. They are currently organised into various sectoral groups under the Manufacturer’s Association of Nigeria (MAN). Producers of alcoholic beverages organised under the Distillers and Blenders Association of Nigeria also need to key into the reforms 

“4. Importers: Strategic partners involved in importation of different items into the country will be mobilised to participate in the ARMOR program. A key stakeholder group is the Association of Nigeria Customs Agents (ANCLA). 

“5. Vehicle Importers and Manufacturers: Stakeholders in the automobile trade industry must be engaged on reforms involving the introduction of green taxes on high GHG emission vehicles. 

Local manufacturing and assembly of vehicles is growing through a phase of growth in Nigeria. The demand for vehicles is mostly met through importation by vehicle importers under the aegis of Association of Motor Dealers of Nigeria (AMDON).”


The document also emphasized the importance of engaging vulnerable groups to ensure they are not disproportionately affected by these changes. 

It also said: 

“Services that will be subjected to the newly introduced excises are regulated by key public sector agencies. The introduction of the new revenue measures will require the application of existing regulatory mechanisms available within these institutions. The concerned institutions include 

“1. Nigerian Communication Commission 

“2. Central Bank of Nigeria. 

“There are also agencies with the mandate for making policies on some of the issues covered in the ARMOR program with respect to policy framework on matters of public interest in Health and Environmental Protection. The government institutions relevant to ARMOR in this regard are. 

“1. Federal Ministry of Environment 

“2. National Environmental Standards Regulatory and Enforcement Agency (NESREA) 

“3. Federal Ministry of Health” 

About the program 

The PforR Program is part of a larger governmental initiative running from 2024 to 2028, aimed at reforming tax and excise regimes, enhancing the administrative capabilities of tax and customs, and ensuring transparency in oil and gas revenue management. 

The World Bank’s contribution of $750 million constitutes a significant portion of the program’s budget. 

The Federal Government is expected to contribute $1.17 billion through annual budgetary. 

The document noted: 

“The PforR Program scope includes a subset of actions from the government program to be conducted during 2024 to 2028 at the federal level. The alignment ensures that the World Bank’s intervention supports and enhances the sustainability and impact of the government initiative during the main period of implementation with a focus on reforms of tax and excise regimes, tax and customs administrative improvements, and enhanced transparency of oil and gas revenues remitted by NNPCL. 

“The government program is funded from annual budget allocations of $1.17 billion to FMF, FIRS and NCS. The PforR with results based financing of $730 million, and $20 million investment financing, is 62 percent of the program budget” 

FIRS, NCS to get $5 million each Additionally, the program outlines specific allocations for technical assistance, with $5 million each going to the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS) to support their capacity to implement these new measures effectively. 

This includes the development of systems for better data sharing, risk-based audits, and compliance processes, as well as substantial investments in program management and capacity building. 

There will also be $10 million for project management, tax policy capacity-building and other expenses. In total, the amount makes the $20 million investment financing before the release of $730 million in line with fiscal targets met. 

READ ALSO: Focus on Fall of Naira, Insecurity And Hunger - Charly Boy Slams Tinubu’s Aide, Onanuga for Referring to Obi as ‘Bitter’

Source : Nairametrics

Are you an artiste? Do you want your music to go viral and reach a large number of audience? Promote your music and Submit your story on by clicking here. For Advert Inquiries Tel/+44(0)7590363984

For More:   Subscribe to

Subscribe to Our Posts via Email

Share This

No comments:

Post a Comment

Listen to This Beautiful New Talent - Winter Wolf - Singing "Midnight"

Post Bottom Ad