TAXATION: All telecommunications services, including calls, SMS, and data services, will now be subject to an additional 5% excise duty, according to arrangements finalized by the federal government.
This was announced by Zainab Ahmed, the Minister of Finance and national planning, at a stakeholders’ event held by the Nigerian Communications Commission, NCC, on Thursday in Abuja.
The Minister claimed that the federal government’s desperate attempt to boost falling oil and gas revenues was what drove the move.
Notable Quote:
According to the finance minister, “The issue of revenue is not something that need to be shy away from, our revenue can no longer take care of our needs as a country,” she said. “Also Nigeria is no longer making enough money in oil revenue hence the attention is shifting to non-oil revenue.”
Mrs. Ahmed pleaded with stakeholders to facilitate the application of the 5% exercise duty on telecommunications services through Musa Umar, Assistant Director, Tax and Policy who represented her at the event.
The minister argued that other African countries, like Malawi, Tanzania, Uganda, and others, have effectively tapped into this strategy of producing revenue in order to defend the recently adopted tax.
Takeaway:
Nevertheless, the Minister tried to assure Nigerians that the President Buhari administration is dedicated to putting the regulation into effect smoothly so as not to harm Nigerians.
She however, could not explain how the imposition of additional 5% tax on already impoverished Nigerians can be administered without harming people who are currently faced with burdens of the already heavily taxed telecom sector according to ALTON chairman.
However, Engr Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria, ALTON, responded to the event by describing the new tax regime as an odd action and uncommon development.
Insinuating that the new tax would be passed on to subscribers, he decried the fact that it was a patchwork of 39 distinct taxes that the nation’s telecom carriers had to pay.
Notable Quotes:
In his words, “It is a strange move, it appears a bit unusual. Excise duty is supposed to be apportioned to goods and products, but we are surprised this is on services.”
Engr Gbenga Adebayo also added, “We currently pay a lot of taxes, running into 39 of them, so we can’t add more to the our existing burden. We won’t be able to absolve this on behalf of subscribers.
“The five per cent excise duty will be paid by the subscribers. It will collected by the operators on all voice and data services including OTT and remitted to the Nigerians Customs.”
