Dear Reader,
“Taxation is the art of plucking the goose so as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.” —Jean-Baptiste Colbert.
For years, Nigeria’s telecom subscribers have been the geese. But this September, President Bola Tinubu clipped the claws of a particularly unpopular levy: the 5 percent excise duty on calls and data.
Born in 2020 under former President Buhari’s Finance Act, the tax was always controversial. Consumer associations, advocacy groups, and industry leaders warned it would raise costs in a country already weighed down by inflation and unreliable service.
Our staff writer Shereefdeen Ahmad wrote that for 172 million active subscribers already struggling with inconsistent calls and vanishing data, an extra tax felt unbearable. The discontent reached its peak this year when operators approved a 50 percent tariff hike. The five percent duty would have made things even worse, pushing the total tax burden on calls and data to 12.5 percent once VAT was included.
“Subscribers would have faced an additional tariff increase anytime soon,” warned Chief Deolu Ogunbanjo, President of the National Association of Telecom Subscribers of Nigeria (NATCOMs).
But the story doesn’t end with subscribers. Industry analysts argue that the removal of the duty is also good news for small businesses and investors, saying Nigeria’s telecom sector is a backbone of the economy. In 2022, it contributed over ₦10 trillion to GDP and by mid-2023 had grown to 16 percent of GDP, according to the National Bureau of Statistics. Over-taxing such a vital sector would have choked one of Nigeria’s most dynamic engines of growth.
Economists at Stransact, a tax consultancy, put it bluntly: multiple taxes create a hostile business environment, discourage investment, and force smaller players to shut down. It says Nigeria wants to be a place where digital businesses can survive, thrive, and innovate.
A freer telecom sector means lower costs, stronger SMEs, and renewed investor confidence in Nigeria’s digital economy.
Read the full article here and check out our website for more of our journalism in the defence of liberty.
For freedom and prosperity,
Abdullah Tijani
Editor, The Liberalist
Do you have reflections, comments, or reports on the state of liberty in your country? Write to us at: editor@theliberalist.org.
