The Federal Government has said telecommunications subscribers in the country would start paying five percent tax on calls, SMS data and other telecom services.
This was disclosed at the Nigerian Communications Commission (NCC) ‘Stakeholders Forum on the Implementation of Excise Duty on All Telecommunications Services’ held on Thursday in Abuja.
Speaking at the event, the Minister of Finance, Budget and Planning, Mrs Zainab Ahmed, urged stakeholders to support the implementation of the 5% excise duty on telecommunications services.
Ahmed, who was represented by the Assistant Director, Tax and Policy, Musa Umar, applauded NCC for providing the platform to increase Nigeria’s revenue generation.
According to her, other countries in Africa such as Malawi, Uganda and Tanzania, have all adopted this strategy to create more revenues for their nations and change their economic situation for good.
“The issue of revenue is not something to shy away from, our revenue can no longer take care of our needs as a country.
“Also, Nigeria is no longer making enough money in Oil revenue, hence the attention is shifting to Non-revenue”, Ahmed stated.
She assured that the exercise will be carried out in a seamless manner with minimal impact on citizens.
Earlier, in his remark, NCC Executive Vice Chairman, Prof Umar Danbatta said the forum was necessary for stakeholders to understand the 5% exercise duty on telecom services implementation.
“As telecoms industry regulator, the Nigerian Communications Commission has engaged with the Federal Ministry of Finance, the Nigerian Customs Service and consultants from the World Bank to get needed clarifications.
“These engagements enabled us to better understand the objectives and proposed implementation mechanisms of the Excise Duty. Nonetheless, we consider it imperative that these implementing agencies should also meet directly with telecoms industry stakeholders to address areas of concern”, he said.
On his part, the Comptroller General of the Nigerian Customs Service, Hameed Ali, urged stakeholders to be patriotic toward implementing the policy.
Hameed noted that telecommunications operators must comply with the service to effectively achieve 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.
Meanwhile, the Association of Licenced Telecoms Operators of Nigeria (ALTON), Association of Telecommunications Companies of Nigeria (ATCON) and the National Association of Telecoms Subscribers(NATCOMS) have all described the move as strange, insensitive and irresponsible.
ALTON Chairman, Engr Gbenga Adebayo, while reacting to the development, said excise duty on services was unusual and insisted that the new tax burden would be passed to subscribers.
“It is a strange move, it appears a bit unusual, excise duty is supposed to be apportioned to goods and products, but we are surprise this is on Services.
“We will continue to support government, but ALTON, won’t be able to subsidy this on behalf of subscribers in addition to the 7.5% VAT making it 12.5% payable by subscribers to the federal government.
“We currently pay a lot of taxes, running into 39 of them, so we can add more to the existing burden. We won’t be able to absolve this on behalf of subscribers.
“The 5% Excise Duty will be paid by the subscribers. It will be collected by the operators on all voice and data services including OTT and remitted to the Nigerians Customs”, he stated.
On his part, the President of ATCON, Engr Ken Nnamani, said, “the proposed excise duty do not comply with principle of taxation, fairness, certainty, convenience and efficiency.”
Nnamani, represented by ATCON Executive Secretary, Ajibola Olude, said FG condemned government’s refusal to address issue of foreign exchange and other challenges troubling the telecom industry in Nigeria.
Also, NATCOMS President, Chief Deolu Ogunbajo, said the government’s action is insensitivity and ill-timed.
“It is unfortunate that 5% excise duty is coming again together with other 38 taxes”, he said, adding that other countries in Africa paying 5% tax on telecommunications services do not have 39 others taxes.
“This is insensitivity, and irresponsible, the government should not kill the telecom industry”, he said.