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 â Accelerating Resource Mobilisation Reforms programme between Nigeria and the World Bank.
A copy of the planâs 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 theâŻsuspension ofâŻthe five per cent excise duty on telecommunications and theâŻImport 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 programmeâs development objective is to strengthen the governmentâs 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 reformingâŻtax and excise regimes,âŻenhancingâŻthe administrative capabilities of tax and customs, andâŻensuringâŻtransparency in oil and gas revenue management.
The WorldâŻBankâsâŻcontribution of $750m constitutes a significant portion of theâŻprogrammeâsâŻbudget and the government is expected to contributeâŻ$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,âŻas well asâŻthe general tax-paying public, importers and international traders.
Key industry groups such as the Association of Licensed Telecom Operators of NigeriaâŻare engaged regarding the excise duties on telecom services.
The draft document stated, âDomestic 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.
âCommittee of Bankers: Introduction of EMT levy on electronic money transfers through the Nigerian Banking System would need the buy-in of all banking institutions
âManufacturerâs Association of Nigeria: Manufacturers of tobacco products, sugar-sweetened beverages and alcoholic beverages who would be required to collect excises on their products are critical stakeholders for the introduction of the new excise regime. They are currently organised into various sectoral groups under the Manufacturerâs Association of Nigeria. Producers of alcoholic beverages organised under the Distillers and Blenders Association of Nigeria also need to key into the reforms.
âAlso, strategic partners involved in the importation of different items into the country will be mobilised to participate in the ARMOR programme. A key stakeholder group is the Association of Nigeria Customs Agents.
âVehicle Importers and Manufacturers: Stakeholders in the automobile trade industry must be engaged in reforms involving the introduction of green taxes on high GHG emission vehicles. Local manufacturing and assembly of vehicles is growing through a phase of growth in Nigeria. The demand for vehicles is mostly met through importation by vehicle importers under the aegis of the Association of Motor Dealers of Nigeria.â
The document also emphasised the importance of engaging vulnerable groups to ensure they are not disproportionately affected by these changes.
It also said, âServices that will be subjected to the newly introduced excises are regulated by key public sector agencies. 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, the Central Bank of Nigeria.
âThere are also agencies with the mandate for making policies on some of the issues covered in the ARMOR program concerning policy framework on matters of public interest in Health and Environmental Protection. The government institutions relevant to ARMOR in this regard are the Federal Ministry of Environment, the National Environmental Standards Regulatory and Enforcement Agency, and the Federal Ministry of Health.â
Additionally, the programme outlines specific allocations for technical assistance, with $5m each going to the Federal Inland Revenue Service and the Nigeria Customs Service to support their capacity to implement these new measures effectively.
ThisâŻincludesâŻthe development ofâŻsystems for better data sharing, risk-based audits,âŻand compliance processes, as well asâŻsubstantial investments in program management and capacity building.
âThe government program 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 per cent of the program budgetâ
âThere 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.â
Additionally, Olamide âBaddoâ had given him a whooping $20K dollars, and he noted that the most marveling part was that the YBNL executive never came out to tweet about it.
