- The federal government of Nigeria continues to mull the possibility of imposing a 5% excise fee on telecommunication taxes.
- The Minister of Communications and Digital Economy, Isa Pantami has declared his opposition to the collection of such taxes from the populace.
Telecom tax in Nigeria is about to go up as the federal government of the West African nation is looking at introducing an additional 5% excise duty in telecommunication taxes.
This development is away from the current 7.5% Value Added Tax, VAT on telecommunication services which will amount to taxpayers paying as much as 12.5% to access these services if the new proposal sees the light of the day.
On the flip side, Nigeria’s minister of communications and digital economy, Isa Pantami, has rejected the planned taxation, pointing out that the process of enacting the new policy did not follow the right process of allowing the chairman of the House Communications Committee to be involved in the process.
The minister further highlights that the policy is ill-timed as the masses are already going through the headache of meeting up with several financial burdens due to the inflationary trend ongoing in the country and globally.
A negative impact on the nation’s Gross Domestic Product (GDP) was also highlighted by the minister as a deterrent to increasing the tax burden of the people through the new 5% excise fees.
Below are statements from the minister as gathered by Africataxreview.com:
“Any attempt to impose an excise duty on telecommunication services is not met with satisfaction by the ministry of communications and the digital economy.
“First of all, I was not formally consulted, and part of the rulemaking process includes inviting stakeholders to submit comments. Second, we would have contested the submission if we had been contacted.
“The sectors that are contributing to our economy today are few. What we should be doing is to ensure that all other sectors can also contribute. A lot of sectors are consumers, these are the sectors that we should be tasked to contribute.
“Today, a sector cannot be a consumer; each sector must make a specific amount of economic contributions. And if we don’t do it, the pressure will increase and we’ll end up eliminating the digital economy sector.
“We will make further steps to fight it. As a minister, based on the provision of the constitution of Nigeria, section 148, we are exercising the powers of Mr president.
Telecom Tax in Nigeria: More Reactions on 5% Excise Fees
The Association of Licensed Telecom Operators of Nigeria (ALTON) also supported the position of the minister, reiterating that an increase in the financial burdens of taxpayers will spell doom, affecting business growth.
ALTON’s president, Gbenga Adebayo had revealed the following plans to impose additional tax in the sector that already pays 39 other taxes. He advised that any attempt to introduce further taxes will see operators transferring the cost to end users.
In the same thoughts, the national president of the National Association of Telecoms Subscribers, Adeolu Ogubanjo, reiterates that the development will bring more negatives to the administration.
Recall that to show the depth of financial challenges going on in the telecommunication sector due to the rising cost of operation caused by the surge in diesel, the telcos had requested a 40% increase in the price of their services 3 months ago, but the Nigerian Communications Commission (NCC) dismissed that request.
Follow us on Twitter for more update
The information contained herein is general and is not intended, and should not be taken, as legal, accounting or tax advice provided by Taxmobile.Online Inc to the reader. This information remains strictly the opinion of Taxmobile.Online Inc.
The reader also is cautioned that this material may not apply to, or suitable for, the reader’s specific circumstances or needs, and may require consideration of other tax factors if any action is to be contemplated. The reader should contact his or her Tax Advisers before taking any action based on this information.
All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Taxmobile.Online Inc.