Minister opposes the planned to impose 5% Excise Duty in the Telecom Sector

Ibekimi Oriamaja Reports.

Dr. Isa Ibrahim Pantami, Minister of Communications and Digital Economy, rejected yesterday the planned implementation of a 5% excise duty in the telecom sector.

Pantami spoke out against the policy at a telecom forum in Lagos organized by the Nigeria Office for Developing the Indigenous Telecoms Sector (NODITS), a Nigeria Communications Commission agency.

He stated that he would use all legal means to prevent the proposed 5% excise duty tax on telecom consumers.

The federal government, through the Ministry of Finance, announced last week in Abuja that it would begin implementing a 5% excise duty tax on all voice calls, SMS, and data services, in addition to the existing 7.5% VAT paid for goods and services across all sectors of the economy.

The government disclosed the 5% excise duty during a stakeholders’ meeting hosted by the Nigerian Communications Commission (NCC), the telecoms industry regulator.

“The 5% excise duty has been in the Finance Act 2020 but has never been implemented,” said Zainab Ahmed, who was represented at the meeting by Musa Umar, Assistant Director, Tax Policy, Federal Ministry of Finance, Budget, and National Planning. The 5% excise duty will now be collected by telecom operators and paid to the federal government on a monthly basis, on or before the 21st of each month.”

Pantami criticized the timing and process of imposing the telecom tax, arguing that part of the responsibility of a responsive government was not to exacerbate citizens’ difficulties.

He maintained that a 5% excise duty was not in his favor.

“I have not been officially contacted.” If we are, we will undoubtedly present our case. Encouragement should be given to sectors that contribute to the economy. You impose excise duty to discourage the purchase of luxury goods such as alcohol, but broadband in the telecom sector is a necessity.”

“If you look closely, the sector contributes 2% excise duty, 7.5% VAT to the economy, and you want to add more to create additional hardship.” This cannot be tolerated at this time, and will be opposed,” Pantami stated.

He urged the tax masters to broaden the scope of other sectors that are not contributing to the economy.

“We must band together to save the sector.” Only the telecom sector contributed 13%, and you want to increase it. “This is completely unacceptable,” Pantami said.

Pantami also criticized the legislative process that resulted in the harsh tax, claiming that the Chairman of the House Committee on Communications was unaware of it and that it should be reinstated for the benefit of telecom subscribers, the telecom industry, and the Nigerian economy.

Pantami believed that increasing taxes on the sector would have a negative impact on its contribution to the country’s GDP (GDP).

“We will look into other ways to reverse it.” We are exercising Mr. President’s powers as ministers in accordance with Section 148 of the Nigerian Constitution. That is stated in the constitution. At the very least, I am a major stakeholder; when VAT was raised to 7.5%, I was not consulted about the 5% excise duty.

“I just heard the announcement, and I think there’s something fishy going on, and I’m glad we’re on the same page as our National Assembly members who are here.”

“They have not been consulted, despite the fact that they are members of the committees.” So, perhaps, in addition to making our position known, we would work behind the scenes to oppose any policy that would destroy the digital economy sector. This is a sector that we value, and we will go to any length to legitimately and legally protect its interests,” Pantami added.

Gbenga Adebayo, Chairman of the Association of Licensed Telecom Operators of Nigeria (ALTON), insisted that if the federal government implemented the new tax, it would be passed on to subscribers.

“It is a strange move; it appears to be a bit unusual,” Adebayo said. Excise duty is supposed to be levied on goods and services, but we’re surprised it’s levied on telecom services.

“We will continue to support the government, but ALTON will be unable to subsidize this on behalf of subscribers in addition to the 7.5 percent VAT, making it 12.5 percent payable to the federal government by subscribers.”

“We already pay a lot of taxes, 39 of them, so we cannot add to the existing burden.” This will be impossible for us to absorb on behalf of subscribers.”