New Telegraph

Stakeholders to FG: Stop killing telecoms sector with tax

Telecoms stakeholders under the umbrellas of The National Association of Telecoms Subscribers (NATCOMS), Association of Telephone, Cable Tv and Internet Subscribers of Nigeria (ATCIS) as well as Association of Licensed Telecom Operators of Nigeria (ALTON) have warned the Federal Government over various taxes being introduced in the sector, saying such act may paralyse the sector if not addressed. The Federal Government, through the Budget Office of the Federation, had revealed that it would begin the implementation of its proposed excise duties on telecommunication services and beverages in 2023.

Recently, the Minister of Finance, Budget and National Planning, Zainab Ahmed, had announced that the Federal Government would impose a five per cent excise duty on calls, data and SMS. Earlier in May, this year, the Federal Government had slammed a new tax on phone calls, “to fund free healthcare for the Vulnerable Group in Nigeria.” The tax, an equivalent of a minimum of one kobo per second for phone calls, was said to be part of the sources of funds required to finance free healthcare for the vulnerable group in Nigeria. It was contained in the National Health Insurance Authority Bill 2021 signed by President Muhammadu Buhari.

The Minister of Communications and Digital Economy, Isa Pantami and other stakeholders have, however, frowned at the proposed five per cent excise duty, saying the sector should not be further taxed. Pantami had said the Ministry of Communications and Digital Economy was not satisfied with it and would resist it, while calling on the National Assembly not to approve it. “We will go against any policy that will destroy the digital economy sector. We will go to any extent to legitimately and legally defend its interest,” he said.

The Budget Office of the Federation, which is under the Ministry of Finance, Budget and National Planning, revealed its plan in its ‘2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper,’ which was released on Friday. According to the ministry, this is in a bid to boost its nonoil revenue streams.

The minister further said the excise duty revenue is expected to grow exponentially because of the introduction of telecoms service charge. Explaining one of the strategies that would be implemented to improve Customs’ revenue collections over the period 2023-2025, the office said: “Full implementation of excise duty on telecom services, alcoholic, sugar-sweetened beverages, cigarettes and tobacco products. “Therefore, excise revenue is expected to grow exponentially because of the introduction of the telecom service charge and SSBs.” It explained that the law now empowered the FIRS to appoint anyone as its agent to withhold or collect VAT and remit same to the service. Stating government’s plight, the budget office said: “Revenue generation remains the major fiscal challenge of the Federal Government.

“The systemic resource mobilisation problem has been compounded by recent economic recssions. Recognising that domestic revenue mobilization is important for sustainable development, the Federal Government has instituted the Strategic Revenue Growth Initiatives to improve government revenue and entrench fiscal prudence, with emphasis on achieving value for money. “These measures include improving the tax administration framework, including tax filing and payment, as well as the introduction of new and/ or further increases in existing pro-health taxes like excise on sugar-sweetened beverages, tobacco, and alcohol.

Mixed reactions have greeted the implementation of these measures.” Speaking at a stakeholders’ forum on the implementation of excise duty on telecommunications services in Nigeria, the Minister of Finance Budget and National Planning, who spoke through Assistant Chief Officer of the Ministry, Mr Frank Oshanipin, said: “The duty rate was not captured in the Act because it is the responsibility of the President to fix rate on excise duties and he has fixed five per cent for telecommunication services which include GSM. “It is public knowledge that our revenue cannot run our financial obligations, so we are to shift our attention to the non-oil revenue.

The responsibility of generating revenue to run the government lies with us all.” Speaking to New Telegraph, the President of the Association, Adeolu Ogunbanjo, said the sector was overtaxed. Ogunbanjo, who noted that there were already about 36 different taxes imposed on the sector, condemned in its entirety the newly proposed five per cent excise duty recently announced by the Minister of Finance Budget and National Planning, Zainab Ahmed. He said the sector may be rendered ineffective if the Federal Government goes ahead to implement the five per cent exercise duty in 2023.

“It’s unfortunate that FG is thinking about any increment at this time. There are minimum of 38 taxes already being charged on telecom services, product, equipment — all that. 38 different taxes. Now the telecom operators, ALTON is saying that the five per cent they cannot bear it, they will pass it on to the consumers and that means many consumers, subscribers will not be able to afford telephone call up to a particular level. “The additional taxes will greatly affect the subscribers, it will surely affect the numbers of people that can afford 5G services and that’s why we are crying now. They should please, not implement it. Let them look into luxury goods and alcohol and other things.

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