Mixed reactions trail FG’s plan to impose tax on phone calls

By Emmanuel Elebeke

Nigerian telecommunications consumers may need to tighten their belts in the days ahead, as the Federal Government has concluded  plans  to impose 5% excise duty on all telecommunications services ranging from calls, SMS to data services. 

This is coming as major stakeholders in the sector, the Association of Licensed Telecoms Operators of Nigeria, ALTON, Association of Telecommunications Companies of Nigeria, ATCON, and National Association of Telecoms Subscribers, NATCOMS, have kicked against the move, describing it as anti-people, provocative, strange, insensitive and irresponsible.

They made their position in Abuja known at a stakeholders’ forum organised by the Nigerian Communications Commission, NCC on the proposed implementation of excise  duty on all telecommunications services in Nigeria.

The stakeholders argued that such imposition would further aggravate the suffering of the Nigerian masses who had already been pushed into hardship and extreme poverty.

The new 5 per cent excise duty is part of the new Finance Act signed into law by the President in 2020.

The duty  meant to be collected by the Nigeria Customs Service, following the directives of President Mohammadu Buhari that it should enforce the law on all telecom service providers in the country on all local and foreign goods and services.

In her presentation, the Minister of Finance, Budget and Planning, Mrs Zainab Ahmed, urged stakeholders to support the implementation of the 5% excise duty, saying the decision was informed by the dwindling revenue of the federal government from oil and gas.

Zainab, who was represented by the Assistant Director, Tax and Policy, Mr Musa Umar, commended the NCC for providing the opportunity to interact with stakeholders and to welcome their inputs in the revenue generation drive.

She noted that countries in Africa, such as Malawi, Uganda, Tanzania, among others, had all keyed into this revenue generation pattern.

Earlier in his welcome address, Executive Vice Chairman of NCC, Prof Umar Danbatta, said the forum was necessary for stakeholders to get better clarification on the 5% excise 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.” 

In his remarks, the Comptroller General of the Nigerian Customs Service, Hameed Ali (retd), pleaded with the stakeholders to be patriotic and reason with the government toward implementing the policy.

In his response,  the Chairman,  Association of Licensed Telecommunications Operators of Nigeria, ALTON, Gbenga Adebayo, described the new tax regime as a strange move and an unusual development in the midst of 39 different tax payable by telecom operators in the country.

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