The Nigerian Government has suspended the implementation of a 5% Excise duty on telecommunication services.
The Minister of Communications and Digital Economy, Professor Isa Pantami disclosed this during the inauguration of the Presidential Committee on Excise Duty for the Digital Economy Sector on behalf of President Mummadu Buhari in Abuja, the nation’s capital.
Read Also: Communication Ministry Kicks Against 5% Telecoms Tax
According to the Minister, the telecommunications sector is already overburdened by excessive and multiple taxation.
The Nigerian Government through the Budget Office of the Federation had earlier revealed that it would begin the implementation of its proposed excise duties on telecommunication services and beverages in 2023.
However, Pantami has maintained that he is against the implementation of this tax, which would increase the cost of telecommunication services for Nigerians.
Pantami said that President Buhari granted his prayer for immediate suspension of the 5% excise duty.
“It is because of this the President has granted my prayers, one immediate suspension of excise duty in the digital economy sector, and no two he approved that a committee be constituted to look into the matter carefully and advise him accordingly
“The President has appointed me to be his eyes and ears in the sector. and it is my responsibility to ensure we are just and fair to the operators, government and most importantly our people that are the consumers.”
He further explained the impact of the excise duty on the Nigeria Telecommunications sector.
“Of recent it was announced that some of our respected brother and sister (government officials), kick started the process of introducing excise duty in the telecom sector in which there and then, based on the constitution and being the representative of President Buhari in the sector. I rejected that whole heartedly Being the representative of the president
“I formalised my position and explained to him in a letter that could be referred to as a petition, (reasons; excise duty is usually fixed on luxury products
“I told the president in the letter that if care is taken that attempt will destroy the digital economy sector that is becoming the backbone of our economy.
On reasons why he kicked against the excise duty, Pantami said, “Despite our achievements, we have been recording some challenges in the sector and if care is not taken these challenges could be a barrier to the development of the sector in the next few years to come.
“One of them; excessive taxes and sometimes multiple taxations. As of today, the ICT sector is over burdened by so many categories of taxes to the extent that today there are 41 categories of taxes at the federal and state level, particularly in the telecom sector. Both at the Federal, some at the state level and this is very worrisome.
“Besides these taxes are multiple taxes (the same taxes being collected at the federal is also what the states are insisting be paid to them. If care is not taken this is what will jeopardise the achievements and gains that we have recorded so far in the sector.”
Pantami noted that prices of products and services in other sectors had increased significantly apart from the telecoms in the last three years because of the economic situation in the country.
“The Mobile Network Operators, MNOs have been coming to us to allow them to increase the prices of their products but I have been encouraging them to be patient. In these three years, there were more than 15 attempts to increase the price of telecommunications services and in all of them, I retained my position; saying no.
“And whenever the regulator escalates the matter to me; I will always encourage and urged them to try and persevere with the little profit they are making because the current economic situation in Nigeria doesn’t allow us to continue to add burden on our poor citizens that are suffering and can hardly get three square meals in a day and broadband and telecommunications services are becoming a necessity than a luxury.”
The Committee which is to be chaired by the Minister is to review the 5% exercise duty.
Other Members of the committee include, the Minister of Finance Budget and National Planning, Chairman, Federal Inland Revenue Services (FIRS), Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC) and Representative of all Telecom companies in Nigeria.
PIAK
