The five per cent excise duty introduced on telecommunication services has been removed by the Federal Government after recommendations of a committee, the Presidential Review Committee on Excise Duty in the Digital Economy Sector.
Prime Business Africa understands that the excise duty could see the cost of airtime and data rise, as telecommunications firms will pass the five per cent levy to customers.
This was disclosed by the Minister of Communications and Digital Economy, Isa Pantami, on Tuesday, 21 March 2023, stating that the excise duty was suspended due to the additional burden it will add on the telecom sector, as well as increasing the sufferings of Nigerians.
“I am happy to report to you that President Muhammadu Buhari, GCFR, has approved the exemption of the digital economy sector from the five per cent excise duty to be paid and this is because of the strength of the argument presented to him by the Committee that additional burden on telecom sector will increase the sufferings of Nigerians and that other sectors that are not making as much contribution to the economy should be challenged to do more and pay the five per cent excise duty,” Pantami said.
He stated: “Many MSMEs and SMEs depend on the sector for survival; if the tax is increased, the impact will take a toll on these businesses.”
The minister explained that the telecommunications sector is already burdened by 41 taxes, “There is no need for excise duty in the telecom sector because the industry is already heavily taxed up to 41 taxes. The sector has been contributing hugely to Nigeria’s economy; more tax burden destroys the industry.
“We increased revenue generated by 594 per cent from N51 billion quarterly to N481 billion quarterly. This is the only sector where the prices of services have been reduced. here is no justification for the government to impose more burden on its poor citizens,” Pantami said in the statement.
Meanwhile, The President of the National Association of Telecoms Subscribers (NATCOMS), Adeolu Ogunbanjo, said FG has been sued for imposing too many taxes on the sector, and the removal of the excise duty won’t compel them to withdraw the case.
According to Ogunbanjo, the next administration taking over late May 2023 can introduce the excise duty again, so the removal must be backed with law.
“We cannot withdraw our case until the law is repealed or it has the backing of the law. They need to give it the backing of the law because even though he has said this, the new administration can introduce it again.
“The next administration will be looking to increase revenue. So, until it is amended or repealed, we will still be in court. The next president can always introduce it again. We are in court already and are pursuing it,” Ogunbanjo told Punch.