The federal government has finalized plans to levy a 5% excise duty on all telecommunications services, including calls, SMS, and data services.
Zainab Ahmed, Minister of Finance and National Planning, made the announcement on Thursday at a stakeholders’ forum organized by the Nigerian Communications Commission, NCC, in Abuja, stating that the decision was motivated by the federal government’s desperate need to supplement declining oil and gas revenue.
“The issue of revenue is not something that needs to be shied away from, our revenue can no longer take care of our needs as a country,” she said. “Also Nigeria is no longer making enough money in oil revenue hence the attention is shifting to non-oil revenue.”
Ms Ahmed urged stakeholders to support the implementation of the 5% exercise duty on telecommunications services, as represented by Musa Umar, Assistant Director, Tax and Policy.
The minister defended the recently enacted tax by claiming that several African countries, including Malawi, Tanzania, and Uganda, have successfully used this method of revenue generation. She did, however, assure Nigerians that the government is committed to implementing the regulation in a seamless and non-disruptive manner.
Engr. Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria, ALTON, described the new tax regime as a strange move and an unusual development in response to the development.
He bemoaned that the newly imposed tax was a mishmash of 39 different taxes payable by the country’s telecom operators, implying that the new tax burden would be passed on 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 surprised this is on services,” he said.
We currently pay a lot of taxes, running into 39 of them, so we can’t add more to our existing burden. We won’t be able to absolve this on behalf of subscribers. The five per cent 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 Nigerian Customs, “he added.