Pantami, Zainab Ahmed On Collision Course Over New 5% Tax On Phone Calls, Data

Two major Ministries in the President Muhammadu Buhari-led administration are heading for a showdown over FG’s plan to impose a five per cent excise duty on telecommunications services in Nigeria

Earlier, Minister of Finance Budget and National Planning, Zainab Ahmed, announced that the federal government is preparing to apply a 5 per cent inclusive excise duty on telecommunications services in Nigeria and that Nigerians will soon begin paying a 12.5 per cent tax on those services.

This did not go down well with Nigeria’s Minister of Communications and Digital Economy, Isa Pantami who argued that his ministry, which oversees the industry, was not consulted, and that the timing of such tax at a time Nigerians face hardship is antithetical to the growth of the industry.

Mr Pantami expressed his opposition to the planned imposition at the first Nigerian Indigenous Content Expo 2022 held at the Landmark Centre in Lagos, a statement by the spokesperson of the Nigerian Communications Commission (NCC), Reuben Muoka, said.

“I was not consulted before the decision on five per cent excise duty was reached, and it was unfair to impose such a tax on an industry that was already burdened with other taxes and already contributing about 17 per cent to the country’s revenue,” he said.

The National Assembly, which was also not consulted on the matter before it was publicised, already agreed with Mr Pantami’s position, he claimed.

It would be recalled that Ahmed, announced that the federal government is preparing to apply a 5 per cent inclusive excise duty on telecommunications services in Nigeria, and Nigerians will soon begin paying a 12.5 per cent tax on those services at the weekly Federal Executive Council (FEC) meeting.

This means that five per cent will be added to the already existing 7.5 per cent Value Added Tax (VAT) on telecommunications services. The government increased the Value Added Tax from 5 to 7.5 per cent in 2020.

According to Ahmed, the Finance Act 2020 had a five per cent excise levy that was never put into effect.

The move has been criticised by telecom operators and subscribers.

The burden will fall on telecom use per censoring, the chairman of the Association of Licensed Telecom Owners of Nigeria (ALTON), Gbenga Adebayo said.

This means that users will now pay 12.5 per cent tax on telecom services, and the 5 per cent excise charge on those services will no longer be subsidized.

This is due to the 39 different taxes that we already pay, as well as the epileptic electricity condition since we spend so much money on diesel, he said.

Also, the president of the Association of Telecommunications Companies of Nigeria (ATCON), Ikechukwu Nnamani, who spoke through the Executive Secretary, Ajibola Allude, said that the 5 per cent excise charge on telecom services was out of date with the times.

He said the industry was in dire straits and urged that the 5 per cent excise duty be reduced because it might result in job losses.