Association of Licensed Telecoms Operators of Nigeria (ALTON), Association of Telecommunications Companies of Nigeria (ATCON) and National Association of Telecoms Subscribers (NATCOMS) have kicked against the move by the federal government to impose a 5 per cent excise duty on all telecommunications services ranging from calls, SMS and data services.
The major stakeholders in the sector described the government’s decision as anti-people, provocative, strange, insensitive and irresponsible.
They made the position known at a stakeholders’ forum organised by the Nigerian Communications Commission, NCC on the proposed implementation of the Excise Duty on all telecommunications services in Nigeria held in Abuja.
They argued that such imposition would further aggravate the suffering of the Nigerian masses who had already been pushed into hardship and extreme poverty.
The new 5 per cent Excise Duty is a provision of the new Finance Act signed into law by the President in 2020 and which the Minister of Finance, Budget and Planning, Zainab Ahmed urged stakeholders to support its implementation on telecommunications services, saying that the decision was informed by the dwindling revenue of the Federal government from oil and gas.
Zainab, who was represented by the Assistant Director, Tax and Policy, Musa Umar commended the NCC for the opportunity to interact with stakeholders and to welcome their inputs in the revenue generation drive which countries in Africa like Malawi, Uganda, Tanzania, and others had all keyed into.
Chairman, Association of Licensed Telecommunications Operators of Nigeria, ALTON, Engr Gbenga Adebayo described the new tax regime as a strange move and an unusual development in the midst of 39 different taxes payable by the telecom operators in the country. He noted that the new tax burden would be passed to subscribers.
“We will continue to support the government but ALTON won’t be able to subsidize this on behalf of subscribers in addition to the 7. per cent VAT making it 12.5 per cent payable by subscribers to the federal government. We currently pay a lot of taxes, running into 39 of them, so we can add more to our existing burden. We won’t be able to absorb this on behalf of subscribers.
“The 5 per cent Excise Duty will be paid by the subscribers. It will be collected by the operators on all voice and data services including OTT and remitted to the Nigerians Customs.”
Also responding, the President of ATCON, Engr Ikechukwu Namani said the proposed excise duty does not comply with the principle of taxation, fairness, certainty, convenience and efficiency and called on the government to step it down.
Nnamani, who was represented by ATCON Executive Secretary, Ajibola Olude said Federal Government has continued to turn a blind eye to the issue of foreign exchange and other myriads of challenges facing telecom operators in Nigeria, warning that such a move if implemented would further kill smaller companies and aggravate the sufferings of the masses.
Ahmed stressed that it was needed to change Nigeria’s economic situation for good, adding: “The issue of revenue is not something that needs to be shied 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-revenue”, she said.
Executive Vice Chairman of NCC, Umar Danbatta explained that the forum was necessitated for stakeholders to get better clarifications on the 5 per cent excise duty on telecom services implementation.
He noted: “As the telecoms industry regulator, the Nigerian Communications Commission has engaged with the Federal Ministry of Finance, the Nigerian Customs Service and consultants from the World Bank to get needed clarifications. These engagements enabled us to better understand the objectives and proposed implementation mechanisms of the Excise Duty. Nonetheless, we consider it imperative that these implementing agencies should also meet directly with telecom industry stakeholders to address areas of concern.”
Also, the Comptroller General of the Nigerian Customs Service, Hameed Ali (rtd), pleaded with the stakeholders to be patriotic and reason with the government toward implementing the policy.
Hameed represented by the Assistant Comptroller General of NCS, A.S Oshishi revealed that telecommunications operators are expected to be duly registered with the service for seamless actualization of the process
