The Federal Government has approved the exemption of the telecom sub-sector of Nigeria’s Digital Economy Industry from the five percent excise duty. This decision is in accordance with the recommendations of the committee formed to examine the appropriateness of the duty to the telecom industry, which is widely regarded as being subjected to an excessive number of taxes and other levies. Prof. Isa Ali Ibrahim Pantami, Minister of Communications and Digital Economy, made the announcement in Abuja on Tuesday during a press briefing on an update of the proposed duty.
After opposition from the Minister in August 2022, President Muhammadu Buhari halted the five percent excise duty on the telecommunication sector and constituted a Presidential Review Committee on Excise Duty in the Digital Economy Sector to examine the issue further. Prof. Pantami, who served as the committee’s chair, said that his group had completed its national assignment and sent a report to the President outlining the reasons why the telecom industry should be free from any new taxes.
Telecom sector remained one of the most important contributors to GDP.
According to Reuben Muoka, Director of Public Affairs at the Nigerian Communications Commission, the Minister said that the Committee’s findings could be summed up in three grounds explaining reasons against the proposed levy on the telecom industry and to avoid a fall in the amount of contribution activities the sector is making towards the development of the country’s economy. On the first ground, operators in the digital economy’s telecommunications sub-sector currently pay no less than 41 distinct kinds of taxes, levies, and charges.
Secondly, in terms of GDP, the telecommunication sector has remained one of the most important contributors to the Nigerian economy (GDP). Finally, the fact that the telecom industry is the only one whose service prices have remained consistent despite a general rise in the cost of all sources of production across all sectors was taken into account in objecting to the excise charge. Even in most circumstances, the cost of service in the telecom industry has continued to decrease during the last several years.
Increased tax on the sector would exacerbate Nigerians’ hardships.
Prof. Pantami claimed that the President exempted the telecom industry from paying the excise charge considering the Committee’s recommendation and relied on the provision of Section 5 of the Nigerian 1999 Constitution, as amended. The president also leverages superior constitutions making it possible for him to grant an exemption of the excise duty, which is otherwise required under the Finance Act of 2021 and other subsidiary legislation. He said that the increased tax on the sector would exacerbate Nigerians’ hardships, and he thus advises that underperforming sectors be pushed to do more while paying the 5 percent excise duty.
He also reassured telecom users that the incoming government would uphold the president’s decision to waive duties on the telecom industry, noting that the decision was made for the sake of the country and its people rather than to benefit any one political party or administration. The Minister further stated that the Digital Economy Sector has been making a major contribution to the growth of the Nigerian economy, citing its 14.07% contribution to GDP in the first quarter of 2020, 17.79% in the second quarter of 2021, and 18.44% in the second quarter of 2022.
Quarterly income jumped from N51 billion to over N480 billion.
In addition, he said that the industry’s quarterly income to the government has jumped from N51 billion to over N480 billion, an increase of 594 percent. Notwithstanding the rising cost of operations, such as the energy crisis that has prompted mobile network operators to power base stations with over 32,000 power-generating to give flawless services to its teeming clients, the price of purchasing data has decreased from N1,200 in 2019 to N350 at present.
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FG exempts telecom from the 5% excise duty – Operators in the telecom currently pay no less than 41 distinct taxes, levies. – Express your point of view.
That’s good for the telecoms. The cos of their data won’t be high as it was before. Even if there will be excise duty, it should easily be accounted for.
It’s amazing the sector’s effort towards the development of the country’s economy is been recognize. It would be a drive to make the telecom industry provide better services.
There is no need to burden the telecommunication sector again with unnecessary duty and charges. It will only weaken the sector activities.
The price of services provided by telecommunications companies has been steadily climbing over the past few years, which has been quite detrimental for every
Prices of everything in this industry has increased across all industries, the fact that telecom service rates have stayed stable is cited as evidence against the excise tax.
The excess duty on the telecom industry is already too much that they telecom operators are already charging the public too high. No imagine if they are burden with additional charges. It will come back on the people.
It is good to relieve the telecom with taxes and levies all this high tax demand from them later affect the public because it is from us they will recover the huge tax they we’re ask to pay
Government should know that in order to ease the financial strain on our residents, it is imperative that the telecom industry be exempt from any additional taxes.
It is incredible that the efforts of the industry to contribute to the growth of the economy of the country have been recognised, and it’s a push to help the telecom business deliver better services if it were to happen.
Leaving the telecom sector out of the excuse duty will give the sector recognition and more avenue to develop further and contribute to the economy.
The recognition of the contribution of the sector to the growth of the national economy is astounding. It would be an incentive for the telecommunications industry to upgrade their offerings.
Leaving the telecom out of tax will make them fully face and provide enough effort to make their service better so people can be satisfy they should perform their task well now
FG exempts telecom from the 5% excise duty. Very good, it will add and development our economy to another level. Greatly
The telecommunications industry does not need more fees and taxes added to it. That will have a negative impact on the industry as a whole.
If the telecom industry is exempt from the excise duty it will gain legitimacy and additional opportunities for growth and economic contribution.
Part of the reasons why most foreign companies who come to do business here in Nigeria let out the goods or services at a very exorbitant amount is due to too many taxes by Nigeria Government on them.Double taxation is not helping businesses to thrive well in Nigeria. Imagine the FG saying telecoms should be exempted from the tax due to multiple taxes they are paying.
If the FG could exempt the telecoms from paying the excise duty tax due to some taxes they’re paying it shows that there is double taxation of businesses in Nigeria. This is not healthy for business especially startup businesses.
It is a good idea to exclude the telecom industry from taxes and levies since the public will suffer as a result of the high taxes that they will eventually be asked to pay.
It’s incredible that the sector’s efforts to advance the national economy are being acknowledged. That would serve as motivation for the telecom sector to offer better services.