FG Eyes $750m World Bank Loan, Considers Telecom Tax
In pursuit of securing a new $750m loan from the World Bank, the Federal Government may reintroduce previously suspended telecom tax and other fiscal measures.
This is according to the Stakeholder Engagement Plan for Nigeria – Accelerating Resource Mobilisation Reforms programme between Nigeria and the World Bank.
A copy of the plan’s document posted on the World Bank website indicated that the government might reintroduce the excises on telecom services, and EMT levy on electronic money transfers through the Nigerian Banking System among other taxes.
President Bola Tinubu in July 2023 ordered the suspension of the five per cent excise duty on telecommunications and the Import Tax Adjustment levy on certain vehicles.
However, it appears that this suspension may be lifted to meet the programme targets for a new, yet-to-be-approved World Bank loan with negotiations ongoing between the government and the World Bank.
Checks by our correspondent showed that the government had initially requested to obtain the loan in 2021 but was halted without clear reasons.
The programme’s development objective is to strengthen the government’s financial position by enhancing its capacity to manage and mobilise domestic resources effectively, which includes improving tax and customs compliance and protecting oil revenues.
The planned tax reforms under the ARMOR programme are expected to have significant implications across various economic sectors.
The PforR Programme is part of a larger governmental initiative running from 2024 to 2028, aimed at reforming tax and excise regimes, enhancing the administrative capabilities of tax and customs, and ensuring transparency in oil and gas revenue management.
The World Bank’s contribution of $750m constitutes a significant portion of the programme’s budget and the government is expected to contribute $1.17bn through annual budgetary.
According to the plan, affected stakeholders will include manufacturers of goods such as alcoholic beverages, tobacco products, sugar-sweetened beverages, telecom and banking service providers, as well as the general tax-paying public, importers and international traders.
Key industry groups such as the Association of Licensed Telecom Operators of Nigeria are engaged regarding the excise duties on telecom services.
The draft document stated, “Domestic Revenue Mobilisation drive in the government ARMOR program 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
