Telecom subscribers to pay 5% tax on call, text, data, says FG
The Federal Government has disclosed that telecommunications subscribers would pay five per cent tax on calls, SMS and data services.
Meanwhile, stakeholders in the industry have expressed dissatisfaction over government’s resolve to implement five per cent excise duty on all telecommunications services in Nigeria.
Speaking in Abuja at the Stakeholders Consultative Forum on Implementation of Excise Duty, the Executive Secretary, Association of Telecommunications Companies of Nigeria (ATCON), Ajibola Olude, said taking cognizance of the hardship in Nigeria at a time like this, the government should rescind its decision to implement the five per cent excise duty on telecommunications operators.
He said government should channel its resources to other sectors to diversify the economy.
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“What I am saying is that the proposed excise duty on all telecommunications companies is badly intended by the Ministry of Finance and National Planning and Nigeria Customs. And the current state of Nigerian communication is so bad that only about 756 Internet Service Providers (ISPs) were registered but only 10 is active because of issues of forex.
On his part, Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, insisted that the new tax burden would be passed to subscribers.
According to him, “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. We will continue to support government but ALTON won’t be able to subsidize this on behalf of subscribers in addition to the 7.5 per cent VAT, making it 12.5 per cent payable by subscribers to the Federal Government.
Speaking at the event, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, urged stakeholders to support the implementation of the five per cent excise duty on telecommunications services.
Zainab, represented by the Assistant Director, Tax and Policy, Mr Musa Umar, appreciated Nigeria Communications Commission (NCC) for providing the platform to increase Nigeria’s revenue generation.
She highlighted that countries in Africa like Malawi, Uganda, Tanzania and others have all keyed into this revenue generation pattern, emphasizing that this is needed to change Nigeria’s economic situation for good.
“The issue of revenue is not something we need to shy away from, our revenue can no longer take care of our needs as a country. Also, Nigeria is no longer making enough money in oil revenue, hence the attention is shifting to non-oil revenue sectors, he said”
The Minister explained that the government is committed to implementing the regulation in a seamless manner, which will not affect Nigerians.
Earlier, Executive Vice Chairman, NCC, Prof. Garba Umaru, who was represented by the Executive Commissioner, Stakeholders Management, Adeleke Adewolu, said that the meeting was to engage industry stakeholders and Federal Government agencies on the implementation of excise duty to ensure the framework address the Nigerian telecommunications sector.
“The Commission is here to ensure that the Federal Government implements this initiative, which will help the government to fund the national budget,” he said.
Also, an Assistant Director and Chief Administrative Officer in the Ministry of Budget and National Planning, Frank Oshanipin, said the move to implement the five per cent excise duty was due to dwindling oil revenue.
Telecom subscribers to pay 5% tax on call, text, data, says FG