Nigerians will soon start paying more for data, phone calls, and others as federal government under President Muhammadu Buhari has prepared to increase excise duty on telecommunications services in Nigeria to 12.5%.
This was made known by Mrs. Zainab Ahmed, Minister of Finance, Budget, and National Planning, on Thursday, July 28, 2022, in Abuja at a stakeholders’ roundtable on the application of the excise duty on telecommunications services in Nigeria.
The Nigerian Communications Commission (NCC) organized the event.
This indicates that the existing 7.5% Value Added Tax on telecom services will be increased by 5%.
According to Zainab, who was represented by the Assistant Chief Officer of the Ministry, Mr. Frank Oshanipin, the Finance Act 2020 included a five percent excise fee that was never put into effect.
She said the delay on its implementation was as a result of government engagement with stakeholders.
“Payments are to be made on monthly basis, on or before 21st of every month.
“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 non oil revenue.
“The responsibility of generating revenue to run government lies with us all,” she said.
Mr Gbenga Adebayo, Chairman, Association of Licensed Telecom Owners of Nigeria (ALTON) said the burden would be on telecommunications consumers.
“It means that subscribers will now pay 12.5 per cent tax on telecom services, we will not be able to subsidise the five per cent excise duty on telecom services.
“This is as a result of the 39 multiple taxes we already paying coupled with the epileptic power situation as we spend so much on diesel,” he said.
Meanwhile, the President of the Association of Telecommunications Companies of Nigeria (ATCON), Ikechukwu Nnamani, said the five per cent excise duty on telecom services did not conform with present realities.
Nnamani was represented by the Executive Secretary, Ajibola Alude.
He said that the state of the industry was bleeding and suggested that the five per cent excise duty be stepped down as it could lead to job losses.
“It is not well intended, because the industry is not doing well currently,” he said.