From Adanna Nnamani, Abuja
The Minister of Communications and Digital Economy, Isa Pantami, on Tuesday, said President Muhammadu Buhari has approved the suspension of the five percent excise duty on telecommunications sector.
The Federal Ministry of Finance, Budget and National Planning, had in July, notified the telecom sector of the intention of the government to introduce a five percent excise duty on telecoms operation, in addition to the 7.5 per cent Value Added Tax(VAT) that all sectors of the economy pay for goods and services rendered. After much opposition of the idea, president Buhari later put on hold the policy and inaugurated a committee, chaired by the the Minister of Communications and Digital Economy to review it.
Pantami, at a press briefing with other members of the Presidential Committee on Excise Duty in Abuja, said they arrived at the decision to suspend the proposed 5 percent excise duty after considering the various taxes that the telecoms service providers in the sector are already paying.
The Minister argued that the telecoms industry already pays too many taxes and that there was no rationale for adding to their burden or that of the already-suffering Nigerian people.
He said: “The major argument of the Presidential Committee, where they also agreed that there was no need for excise in the digital economy sector particularly in the telecommunications subsector were that as at today, the telecommunications sub-sector, has been paying 41 categories of taxes, levies and charges.
“Secondly, The sector has been contributing significantly to the Nigerian sector and adding more burden to it could destroy the sector as it happened in two other African countries.
“If you look at the growth of the telecommunications sector, it is really amazing. In the last three years, we have set three unprecedented records in the contribution to the GDP.
“We increased revenue generation based on independent assessment, by 594 percent. Government revenue generation was increased from 51 billion Naira quarterly, to over 408 billion Naira quarterly. It has never happened in any sector in Nigeria.
“So by implication, the sector has been contributing more that enough. So the argument of the committee, is that let other sectors contribute. Instead of putting more burden on one sector, while not look at other sectors that are not contributing so that they can encourage them to contribute?
“All other sectors have been increasing the prices of their goods and services except the telecom sector despite increasing cost of production. “In 2019 the average price of one gigabit of date was 1,200 Naira. As of October, 2022 the average price is 350 Naira. But consider the price of other products and services you enjoy today. We are being affected by diesel and forex, but yet, the price is being reduced.
“With the economic situation of our country, the way our people are suffering, we should be more merciful to them.
“Many MSMEs and SMEs depend on the sector for survival; if the tax is increased, the impact will take a toll on these businesses.
“To this end, on March 6, President Muhammadu Buhari approved the exemption of the digital economy sector on the 5 per cent excise duty because it would harm the Nigeria citizens”.