Nigeria, Africa’s biggest wireless market, is moving ahead with a proposed 5% tax on voice calls, mobile data and text messages to tackle a mounting fiscal crisis.
Finance Minister Zainab Ahmed announced the implementation of the tax, delayed since last year, in an emailed statement that highlighted the government’s strained financial picture. As of April, Africa’s biggest crude producer spends more on debt servicing than it brings in revenue.
“Although Nigeria is celebrated as the largest economy in Africa, translating this wealth into revenues remains a challenge,” Ahmed said. The statement did not say when collections of the levy, which is in addition to a 7.5% value-added tax on calls and data, will begin.
Communications Minister Isa Pantami earlier this month asked the government to reconsider the tax on the grounds that it could slow the expansion of one of the country’s fastest-growing sectors.
A similar tax introduced by West African neighbor Ghana was blamed for a slowdown in mobile-money revenue by MTN Ghana in its first half results. Ghana, also facing a fiscal crisis, introduced a 1.5% e-levy in May to boost government revenue and reduce its burgeoning budget deficit.
Nigeria has one of the lowest tax-to-GDP ratios in the world, at 6% in 2019, according to the Organization for Economic Cooperation and Development.
The government generated 1.63 trillion naira ($3.8 billion) in revenue in the four months through April, against 1.94 trillion naira in debt service payments for the period.
Latest Stories
-
Paris 2024: Opening ceremony showcases grandiose celebration of French culture and diversity
3 hours -
How decline of Indian vultures led to 500,000 human deaths
3 hours -
Paris 2024: Ghana rocks ‘fabulous fugu’ at olympics opening ceremony
4 hours -
Trust Hospital faces financial strain with rising debt levels – Auditor-General’s report
4 hours -
Electrochem lease: Allocate portions of land to Songor people – Resident demand
5 hours -
82 widows receive financial aid from Chayil Foundation
5 hours -
The silent struggles: Female journalists grapple with Ghana’s high cost of living
5 hours -
BoG yet to make any payment to Service Ghana Auto Group
5 hours -
‘Crushed Young’: The Multimedia Group, JL Properties surprise accident victim’s family with fully-furnished apartment
5 hours -
Asante Kotoko needs structure that would outlive any administration – Opoku Nti
6 hours -
JoyNews exposé on Customs officials demanding bribes airs on July 29
6 hours -
JoyNews Impact Maker Awardee ships first consignment of honey from Kwahu Afram Plains
7 hours -
Joint committee under fire over report on salt mining lease granted Electrochem
8 hours -
Life Lounge with Edem Knight-Tay: Don’t be beaten the third time
8 hours -
Pro-NPP group launched to help ‘Break the 8’
8 hours