The Nigerian Communications Commission NCC, has been speaking on the decision of the Federal Government to abolish the five per cent excise duty paid on telecommunications services by operators and service providers, insisting that it is in line with efforts to boost the country’s digital economy growth.

Recall that President Bola Ahmed Tinubu had recently approved a permanent abolition of the five per cent excise duty charged on telecommunications services in the country, in what stakeholders described as a decisive policy move to lower communications costs with a view to accelerating the country’s digital transformation.

The approval by the President puts to rest several months of uncertainty over the controversial levy that would have led to further increases in call and data rates for the country’s active telecomm services subscribers.

Speaking on the new development, Executive Vice-chairman/CEO of the NCC, Dr. Aminu Maida, described it as a relief for over 172 million active subscribers and a boost to investor confidence in Nigeria’s ICT sector.

“The excise duty has been scrapped. It will not come back. This aligns with President Tinubu’s broader tax reforms and his Renewed Hope Agenda to make Nigeria’s business environment more competitive”, Dr. Maida said.

Recall that the excise duty was originally introduced in the 2020 Finance Act, which sparked strong pushback from telecom operators and consumer advocacy groups, who had warned that it would stifle industry growth and worsen affordability for Nigerians already battling with rising living costs across all strata.

It was probably in reaction to these pushbacks that President Tinubu in July 2023, suspended the levy via an Executive Order as part of his fiscal reform agenda.

However, discussions around its reinstatement resurfaced in 2024, creating unease in the industry until this latest announcement confirmed its permanent removal.

Expectedly, its abolition, would among several other factors, come with lots of benefits to both service providers and consumers, including easing cost pressure as consumers could see more affordable voice and data tariffs.

Also, it would boost digital Inclusion by as lower costs will accelerate broadband adoption, aligning with the government’s push for a 70per cent broadband penetration target by the end of 2025.

Additionally, it is expected to stabilise the telecom sector, as operators will leverage its abolition to invest more in infrastructure, especially as the country pushes toward expansion to 5G network.

Industry analysts say the move is a major win for the ICT sector, which contributes more than 16% to Nigeria’s GDP, and could serve as a signal of the government’s commitment to creating a pro-investment climate.

While the removal of the tax is a relief, experts note that affordability gains for subscribers will depend on how operators adjust tariffs in response to reduced levies.

The NCC has assured Nigerians that it will continue to engage stakeholders to ensure consumers enjoy the benefits of the policy change.