President Bola Tinubu’s government is considering lifting the suspended telecom tax and other fiscal policies on Nigerians to secure a new loan of $750 million from the World Bank.
According to a document published by the World Bank, the EMT levy on electronic money transfers through the Nigerian banking system, along with other taxes, is also being considered, in addition to the reintroduction of excises on telecom services.
Recall that President Tinubu suspended the 5% excise duty on telecommunications and the?Import Tax Adjustment levy on certain vehicles in July 2023. However, the document revealed that negotiations were underway between the World Bank and the Federal Government to secure the yet-to-be-approved loan.
The document said, “Domestic Revenue Mobilisation drive in the government ARMOR programme seeks to increase revenue on some targeted industries and sectors of the economy.
“Specific groups and agencies within affected sectors include the 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.
“Committee of Bankers: Introduction of EMT levy on electronic money transfers through the Nigerian Banking System would need the buy-in of all banking institutions”.
It noted that the Manufacturer’s Association of Nigeria (manufacturers of tobacco products, sugar-sweetened beverages and alcoholic beverages) that would be required to collect excises on their products “are critical stakeholders” for the introduction of the new excise regime.
The World Bank explained that services that will be subjected to the newly introduced excises “are regulated by key public sector agencies” and that the “introduction of the new revenue measures will require the application of existing regulatory mechanisms available within these institutions.”
The concerned institutions include the Nigerian Communication Commission (NCC) and the Central Bank of Nigeria, (CBN).
Outlining specific allocations for technical assistance, the document pointed out that the government programme “is funded from annual budget allocations of $1.17 billion to FMF, FIRS and NCS. The PforR, with results-based financing of $730m and $20m investment financing, is 62 percent of the programme budget”.
“There will also be $10m for project management, tax policy capacity-building and other expenses. In total, the amount makes the $20m investment financing before the release of $730m in line with the fiscal targets met”, it added.
