FG’s proposed 5% tax on call, text, data provocative, insensitive, irresponsible – Telecoms stakeholders

Stakeholders in the Nigerian telecommunications industry have rejected the Federal Government’s proposed tax on telecommunications services.

The Federal Government has concluded plans to implement its five per cent Excise Duty on all telecommunications services ranging from calls, SMS and data services.

In spite of the existing 7.5 per cent Value Added Tax that Nigerians pay for goods and services, the federal government, on Thursday, revealed plan to implement the five per cent excise duty on telecoms services which it had previously intimated Nigerians about.

Major stakeholders in the sector, the Association of Licensed Telecoms Operators of Nigeria, Association of Telecommunications Companies of Nigeria and National Association of Telecoms Subscribers have kicked against the move, describing it as anti-people, provocative, strange, insensitive and irresponsible.

They made the position known on Thursday at a stakeholders’ forum organised by the Nigerian Communications Commission on the proposed implementation of the Exercise Duty on all telecommunications services in Nigeria.

They argued that such imposition would further aggravate the suffering of the Nigerian masses who had already been pushed into hardship and extreme poverty.

The new five per cent Exercise Duty is part of the new Finance Act signed into law by the President in 2020.

It is meant to be collected by the Nigerian Customs Service following the directives of the President Muhammadu Buhari that it should enforce the law on all telecom service providers in the country on all local and foreign goods and services.

In her presentation, the Minister of Finance, Budget and Planning, Mrs Zainab Ahmed, urged stakeholders to support the implementation of the five per cent exercise duty on telecommunications services, saying the decision was informed by the dwindling revenue of the Federal government from oil and gas.

Zainab, who was represented by the Assistant Director, Tax and Policy, Mr Musa Umar, commended the NCC for providing the opportunity to interact with stakeholders and to welcome their inputs in the revenue generation drive.

She highlighted that countries in Africa like Malawi, Uganda, Tanzania, others have all keyed into this revenue generation pattern.

The minister emphasised that this is needed to change Nigeria’s economic situation for good.

“Also, the Comptroller General of the Nigerian Customs Service, Hameed Ali (rtd), pleaded with the stakeholders to be patriotic and reason with the government toward implementing the policy.

Hameed represented by the Assistant Comptroller General NCS, Mrs A.S Oshishi revealed that telecommunications operators are expected to be dully registered with the service for seamless actualization of the process.

“Either to pass the cost to consumer or capture it in an appropriation. The payment is to be made in arrears, on the 21st of every month”, he stated.

In his response, the Chairman, Association of Licensed Telecommunications Operators of Nigeria, Engr Gbenga Adebayo, described the new tax regime as a stange move and unsual development in the midst of 39 different tax payable by the telecom operators in the country.