Why FG Suspended The 5% Excise Duty On Telecom Services?
The Nigerian government hinted on July 28 that the five per cent would be added to the already existing 7.5 per cent Value Added Tax (VAT) on telecommunications services.
The Federal Government of Nigeria (FGN) has suspended the implementation of the proposed five per cent excise duty charge on telecom services in the country.
The Minister of Communications and Digital Economy, Prof. Isa Pantami, disclosed this when he recently inaugurated a committee to review the 5 per cent exercise duty in Abuja.
During the committee’s inauguration, Pantami said President Muhammadu Buhari granted his prayer for the immediate suspension of the 5 per cent excise duty.
Pantami said: “It is because of this that the president had granted my prayers. He approved that a committee be constituted to examine the matter and advise him accordingly carefully.
“The president has appointed me to be his eyes and ears in the sector. I am responsible for ensuring we are just and fair to the operators, government and most importantly, the consumers.”
The minister, who serves as the Committee’s Chairman, further told the members how he explained to the president the effect of the excise duty on the sector. “Recently, it was announced that some of our respected brothers and sisters kick-started introducing excise duty in the telecom sector.
“Based on the constitution and is the representative of Buhari in the sector, I rejected that wholeheartedly. I formalised my position and explained to him in a letter that could be referred to as a petition because excise duty was usually fixed on luxury products
“I told the president in a letter that if care is not taken, that attempt will destroy the digital economy sector that is becoming the backbone of our economy,” he said.
On why he kicked against the excise duty, he said despite the sector’s achievements, it also had its challenges, which could be a barrier to its development in the next few years.
“As of today, the ICT sector is overburdened by so many taxes to the extent that there are 41 taxes at the federal and state level, particularly in the telecom sector.
“Besides, these taxes are multiple taxes. The same taxes being collected at the federal level is also what the states are insisting be paid to them.
“If care is not taken, this will jeopardise the achievements and gains that we have recorded so far in the sector,” the minister said. Pantami added that prices of products and services in other sectors had increased significantly apart from the telecom sector in the last three years because of the economic situation in the country.
“The Mobile Network Operators have been coming to us to allow them to increase 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,” he said.
Others are Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC) and Representative of all Telecom companies in Nigeria. # FG Suspends 5% Excise Duty on Telecom Services