A feared increase in telecom service prices, an apparent extension of a 5% excise tax previously earmarked for telecommunications services in Nigeria, may not now happen.

Local press reports now say that President Bola Tinubu has revoked the tax, a move expected to ease cost pressures for millions of mobile users.

The tax was meant to be applied to both voice calls and data. Not surprisingly, it was criticised by both industry players and consumer groups since its announcement under the Muhammadu Buhari administration.

It was, however, suspended in 2022, a decision confirmed in 2023, though it has been unclear what would happen next until Aminu Maida, Executive Vice Chairman of the Nigerian Communications Commission (NCC), said that the tax had been eliminated. 

News reports suggest that there are over 171 million active telecom users across the country, many of whom have faced a combination of service frustrations and a recent 50% tariff increase implemented earlier this year, although this increase was, in part, due to currency devaluation.

Better news is that the NCC apparently sees this tax cancellation as part of a broader regulatory push to improve affordability and service standards in Nigeria’s telecom sector. This includes plans to centralise billing responsibilities with end user platforms and enforce stricter service level benchmarks.

Gbenga Adebayo, who leads the Association of Licensed Telecom Operators of Nigeria (ALTON), has welcomed the move but warned that care must be taken to ensure that new taxes or hidden levies don’t replace the scrapped duty under a different name.

Meanwhile, Deolu Ogunbanjo, head of the National Association of Telecoms Subscribers (NATCOMs), called the decision a step in the right direction. It should also mean an end to NATCOM’s planned legal action over the tax.