FG took forward to implement 5% Excise Duty on Telecom Services.

Ibekimi Oriamaja Reports.

Despite the existing 7.5 percent Value Added Tax (VAT) that Nigerians pay on goods and services, the federal government revealed yesterday that it intends to implement the 5% excise duty on telecoms services that it previously informed Nigerians about.

With this policy, telecom subscribers would now pay 5% of the total cost of the voice call, which would be deducted from the subscriber’s account by the telecom operator and remitted to the government.

The 5% excise duty is an additional fee paid by telecom subscribers that is separate from the cost of voice calls.
The federal government made the announcement yesterday at a stakeholder meeting in Abuja hosted by the Nigerian Communications Commission (NCC).
Mr. Zainab Ahmed, Minister of Finance, Budget, and National Planning, was represented by Musa Umar, Assistant Director, Tax Policy, Federal Ministry of Finance, Budget, and National Planning, while the ministry’s presentation was done by Frank Oshanipin, Assistant Chief Officer in the ministry.

In her presentation at the stakeholders’ forum on the implementation of excise duty on telecommunications services in Nigeria, Zainab made the disclosure.
According to Oshanipin, “the 5% excise duty was in the Finance Act 2020 but was not implemented.”

The delay in implementation was caused by the government’s involvement with stakeholders.
He also stated that payments would be made by the 21st of each month.

“The duty rate was not captured in the Act because it is the President’s responsibility to fix rates on excise duties, and he has fixed 5% as the duty rate for telecommunication services, which include GSM services,” he added.

“It is common knowledge that our revenue cannot cover our financial obligations, so we are shifting our focus to non-oil revenue.”
“The responsibility for raising revenue to run government rests with all of us,” he added.

Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON), however, stated that operators would be unable to subsidize the 5% excise duty on telecom services due to the 39 multiple taxes that they pay, combined with the epileptic power situation that had forced operators to spend so much on diesel.

The President of the Association of Telecommunications Companies of Nigeria (ATCON), Ikechukwu Nnamani, who was represented by ATCON’s Executive Secretary, Ajibola Olude, stated that “the 5% excise duty on telecom services would not be in sync with current realities,” adding that the industry was bleeding.

Olude suggested that the plan be scaled back because it would result in job losses.
“The idea is both timely and poorly intended, as the industry is currently struggling.” Olude stated.
“All active telecom service providers must pay the 5% excise duty,” said the Controller General of the Nigerian Customs Service (NCS), Col. Hameed Ali (Rtd), who was represented by the Assistant Controller at NCS, Lami Wushishi, in her remarks.

However, ALTON Executive Secretary Gbolahan Awonuga stated that the 5% telecom excise duty was not good for the industry because telecom service providers already pay the NCC 2% of their annual revenue.

In his opening remarks, Prof. Umar Garba Danbatta, Executive Vice Chairman/CEO of the Nigerian Communications Commission, who was represented by the Executive Commissioner, Stakeholders Management, Adeleke Adewolu, said: “As communicated in the federal government Circular of March 1, 2022, the 5% Excise Duty was to have been implemented as part of the 2022 Fiscal Policy Measures, but the industry considered the earlier scheduled commencement date of June 1.