FG to Generate N160bn from a Call, Data Taxes

In 2023, the Federal Government will earn N160.46bn through excise duty on telecommunications services.

According to the Nigerian Communications Commission (NCC), the total revenue from operators in GSM, Fixed Wired and Internet Service Providers was N3.21tn by 2021. It will generate N160.46bn if the government implements its 5 per cent excise duty on telecom services.

However, the amount assumes that the revenue from telcos will be static. It could be higher or lower in real terms depending on the economic fundamentals in 2022.

The Federal Government recently announced a plan for a 5% excise tax on telecom services throughout the country.

This information was disclosed by Zainab Ahmad, Minister of Finance Budget & National Planning, at a stakeholder forum about the implementation of excise duties on telecommunications services within Nigeria.

Ahmed spoke through Mr Frank Oshanipin who is the Assistant Chief Officer at the Ministry. He stated that the excise tax was being implemented to raise revenue for the government.

She stated, “The Act does not contain a duty rate. It is up to the President to fix the rate of excise duties. He has set five per cent for telecommunications services that include GSM.

“It’s well-known that our revenue is not sufficient to meet our financial obligations. Therefore, we will shift our focus to non-oil revenue. We all have the responsibility to generate revenue for the government.

Gbenga Adebayo (chairman, Association of Licensed Telecom Owners of Nigeria), stated that telecom consumers will be responsible for the additional 5 per cent tax.

The finance minister stated that the tax would soon be implemented, but questions have since arisen about whether or not the excise duty will actually be implemented.

Isa Pantami (Minister of Communications and Digital Economy), stated Monday that he opposed the tax and would do anything to stop its implementation.

He stated that the telecoms industry already did a lot in terms of revenue generation and any attempts to increase it might have a negative impact on it.

At the Nigerian Telecommunications Indigenous Content Expo, which was held by the Nigeria Office for Developing The Indigenous Telecom Sector, he said, “The ministry for communications and the digital economy does not accept any attempt to introduce an excise duty for telecommunication services.”

He said, “Beyond publicizing our position, we will also go behind the scenes to oppose any policy that would destroy the digital economy sector.” We will do everything we can to defend the digital economy sector’s legitimate and legal interests.”

Telecommunications customers will likely be liable for the tax.

Ajibola Olude (Chief Operating Officer, Association of Telecommunications Companies of Nigeria) commented on the potential revenue the Federal Government could make by implementing this tax.

“The Minister of Communications and Digital Economy criticized the plan, claiming it did not follow proper process. There are established rules that must be followed before the 5% excise duty can be implemented. It is also not feasible due to the current macroeconomic conditions in the country. The prices have not been stable and if they do it, it will cause an increase in crime.”

Adeolu Ogunbanjo (President of the National Association of Telecoms Subscribers), was present at the forum discussing the implementation of excise duty. He told our correspondent that while the government had intended to implement the tax by 2020, it was stopped due to the COVID-19 pandemic.