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FG Suspends 5% Excise Duty On Telecom Services, Inaugurates C’ttee To Review Policy

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Tax Communication
The Minister of Communications and Digital Economy, Prof. Isa Pantami (middle) flanked by members of the committee after their inauguration in Abuja.

The Federal Government yesterday announced the suspension of the proposed 5 per cent excise duty on telecommunications services and inaugurated a committee chaired by the Minister of Communications and Digital Economy, Prof. Isa Pantami to review the policy immediately.

Pantami, who inaugurated the committee which he chairs on the directive of President Muhammadu Buhari, with the Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed as a member, said the decision on the suspended policy will be made after the committee completes its report.

He recalled that the directive by President Buhari followed his petition as the chairman of the Presidential Council on Digital Economy and e-Government. The policy, he said, has the potential to impact negatively on the digital economy sector, particularly on telecommunications, which is already overburdened with 41 tax categories.

He said some of these are multiple taxations because other levels of government imposed the same levies that MNOs had already paid to the Federal Government.

“Excessive taxation has been a central challenge of the information and communications technology sector,” he argued. “It is unfair to overburden such a sector that is so central to the nation’s growth and development, just because the sector rarely receives subsidies which other sectors have enjoyed.

“Despite the spiralling inflation and cost of production, particularly the energy factor, the network service providers have not increased prices of services. I challenge the press to name one sector that has not witnessed price increases in services in the last three years. It is only in telecoms that prices have been stable,” he said.

Other members of the committee inaugurated by Pantami include the executive vice-chairman and chief executive officer (EVC/CEO) of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta; Executive chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami and the representatives of the mobile network operators (MNOs).

Pantami recalled several positive developments in the sector that needs to be sustained through the support of the government.

“Three unprecedented positive developments have occurred in the digital economy sector in the last three years. In the last quarter of 2020, ICT alone, without including digital services, contributed 14.70 per cent to the GDP. In the second quarter of 2021, we saw another record where the sector contributed 17.90 per cent to the GDP. The last record was in the second quarter of 2022 where ICT contributed 18.44 per cent to GDP. By implication, this sector has been contributing a lot to the economy.

“The 5G Spectrum Auction conducted by the NCC in December 2021 contributed $547 million. This is in addition to billions of naira in the spectrum and other fees remitted to the Federal Government’s coffers by the commission.”

A statement by the NCC’s director, public affairs, Reuben Muoka said Danbatta, in his remarks, commended the minister for the leadership and direction of the industry.

“The minister has been leading from the front, including this effort to ensure this meeting takes place. Accordingly, we will do our best to get the best out of this assignment to the benefit of Nigerian citizens.”

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