In 2023, the Federal Government expects to earn N160.46 billion in excise duty on telecommunications services. According to the Nigerian Communications Commission (NCC), the aggregate income of GSM, fixed wired, and Internet service providers in 2021 will be N3.21 trillion.
If the government imposes a 5% excise levy on telecom services, it will raise around N160.46 billion. The figure, however, anticipates that telecom income would remain constant. However, depending on economic factors in 2022, it might be greater or lower in real terms.
The Federal Government has announced a proposal to impose a 5% excise levy on telecom services throughout the country. This was revealed by the Minister of Finance, Budget and National Planning, Zainab Ahmed, during a stakeholders’ forum on the implementation of excise duty on telecommunications services in Nigeria.
Ahmed, who spoke through the Assistant Chief Officer of the Ministry, Mr. Frank Oshanipin, said the implementation of the excise duty was in a bid to increase the government’s revenue.
She said, “The duty rate was not captured in the Act because it is the responsibility of the President to fix the rate on excise duties and he has fixed five percent for telecommunication services, which includes GSM.”
“It is public knowledge that our revenue cannot cover our financial obligations, so we are to shift our attention to non-oil revenue.” The responsibility of generating revenue to run the government lies with us all. “
According to the Chairman of the Association of Licensed Telecom Owners of Nigeria, Gbenga Adebayo, telecom consumers will bear the burden of the additional 5 per cent tax.
At the forum, the finance minister disclosed that the tax would be implemented soon but doubts have since risen concerning whether the excise duty will be implemented at all.
The Minister of Communications and Digital Economy, Isa Pantami, on Monday, disclosed that he was against the tax and would do everything to stop its implementation.
According to him, the telecom industry was already doing a lot regarding revenue generation in the nation and attempts to stretch it any further might negatively impact it.
Speaking at the maiden edition of the Nigerian Telecommunications Indigenous Content Expo organized by the Nigeria Office for Developing the Indigenous Telecom Sector, he stated, “The ministry of communications and digital economy is not satisfied with any effort to introduce excise duty on telecommunication services.”
He added, “Beyond making our position known, we will go behind the scenes and go against any policy that will destroy the digital economy sector.” We will go to any extent to legitimately and legally defend its interests. “
The tax is likely to be passed on to telecommunications consumers, who will bear the burden.
Commenting on the amount the Federal Government might make from implementing this tax, the Chief Operating Officer of the Association of Telecommunications Companies of Nigeria, Ajibola Olude, said, “I don’t see the Federal Government implementing the five percent excise duty.”
“The Minister for Communications and Digital Economy faulted the plan, saying it didn’t follow due process.” There are laid-down rules before implementing that 5 per cent excise duty. Another reason why I don’t see it being implemented is because of the current macroeconomic factors in the country. If they implement it, it will lead to an upsurge in crimes. “
The President of the National Association of Telecoms Subscribers, Adeolu Ogunbanjo, who was at the forum where the implementation of the excise duty was discussed, stated that the government had planned to implement the tax in 2020 but stopped because of the COVID-19 pandemic.