In a bid to secure a new $750 million loan from the World Bank, the Nigerian government is contemplating reintroducing previously suspended fiscal measures, including telecom taxes. According to the Stakeholder Engagement Plan for Nigeria – Accelerating Resource Mobilisation Reforms (ARMOR) program between Nigeria and the World Bank, the government may reinstate excises on telecom services and Electronic Money Transfer (EMT) levies on electronic money transfers through the Nigerian Banking System, among other taxes.
President Bola Tinubu’s suspension of the five per cent excise duty on telecommunications and the Import Tax Adjustment levy on certain vehicles in July 2023 may be lifted to meet the targets of the ARMOR program, currently under negotiation between the government and the World Bank.
The ARMOR program aims to strengthen the government’s financial position by enhancing its capacity to manage and mobilize domestic resources effectively. This includes improving tax and customs compliance and protecting oil revenues. The planned tax reforms are expected to have significant implications across various economic sectors and are part of a larger governmental initiative running from 2024 to 2028.
Key industry groups, such as telecom and banking service providers, manufacturers of alcoholic beverages, tobacco products, and sugar-sweetened beverages, as well as the general tax-paying public, importers, and international traders, will be affected by these measures.
Stakeholders, including the Association of Licensed Telecom Operators of Nigeria, the Committee of Bankers, and the Manufacturer’s Association of Nigeria, will be engaged in the implementation of these tax reforms. The document emphasizes the importance of ensuring vulnerable groups are not disproportionately affected by these changes.
Technical assistance allocations of $5 million each will be provided to the Federal Inland Revenue Service and the Nigeria Customs Service to support their capacity to implement these measures effectively.
The ARMOR program is funded primarily from annual budget allocations, with additional financing from the World Bank. It underscores the government’s commitment to meeting fiscal targets and enhancing revenue mobilization efforts in Nigeria.