Nigerians To Pay 5% Tax On Calls, SMS, Data As FG Set To Implement New Excise Duty

The Federal Government on Thursday said Nigerian subscribers would start paying 5% tax on every calls, SMS, data and other telecommunication services.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed stated this during a stakeholders forum on the implementation of 5% excise duty on all telecommunications service providers in Nigeria.

Mrs. Zainab Ahmed, said the high cost of running government businesses couple with the global trend in the oil market made the government to shift its focus into non oil revenue.

“The issue of revenue is not something that need to be shy away from, our revenue can no longer take care of our needs as a country”.

“And one of the legitimate areas that we feel government can leverage upon to generate revenue for the country is through excise duty tax particularly in telecommunication industry”.

The minister, who was represented by the Assistant Director, Tax Policy, Mr. Musa Umar, urged stakeholders to support the new excise duty, as other African countries have adopted such in boosting their economy.

She, however, commended the NCC for providing such forum to engage with various stakeholders on how best to implement the excise duty rate in a seamless manner without any negative effect on the telecommunication industry.

She said the regulation of the excise duty which is in a draft form will also serve as the major tools in which the excise duty will be based.

“This law makes provision for excise duty for telecommunications service in pre-paid and post-paid. But this rate was not determine by the Finance Act because it’s the responsibility of Mr. President to determine the excise duty rate in the schedule attached to the Customs and Excise Management Act. To that effect Mr. president has fixed 5% on telecommunication services chargable from 1st March, 2022”.

On his part, the Executive Vice Chairman/CEO of NCC, Professor Umar Garba Danbatta in his opening remarks, said the stakeholders forum is designed to ensure interaction between industry stakeholders and Excise Duty implementation agencies to ensure that the resulting framework adequately address the peculiarities of the telecoms sector.

“As 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 telecoms industry stakeholders to address areas of concern”.

“In facilitating this Forum, the Commission is playing a dual role. As an agency of the Federal Government of Nigeria, it is our duty to support the implementation of government initiatives which impact the telecoms sector. The Federal Government expects our industry to effectively contribute towards enhancing revenues for government so that it can fund the national budget and deliver on its critical responsibilities to all Nigerians. We cannot afford to fail in this regard”.

“Secondly, as the regulator of the telecoms industry, we are responsible for ensuring that industry stakeholders understand their fiscal and other obligations, so that they can maintain full compliance with government policy”.

He urged participants to seize this opportunity for robust and professional interaction with the implementing agencies

On his part, The Comptroller-General of Customs is Col. Hameed Ibrahim Ali (Rtd) urged the telecommunication stakeholders to collaborate with the service in ensuring the successful implementation of this laudable project.

Col. Ali, who was represented by the the Assistant Comptroller General of NCS, Mrs. LSA Wushishi: “The Customs and Excise Management Act CAP 2004(CEMA), section 117(2) – stipulate that the date for the payment of excise duty shall be on or before the 21st of every month. It shall be paid by operators providing such services and they also have the choice of passing it into the consumers”.

He noted that telecoms service providers are mandated to register with the Nigeria Customs Service on its official website at www.trade.gov.ng, as well as provide their monthly returns for review and verification.

He however warned that failure to do so would attract certain penalties.

On the contrary, the President of The Association of Telecommunication Companies of Nigeria (ATCON), Engr Ken Nnamani, kicked against the federal government move to impose the new excise duty rate on telcom subscribers.

Mr Nnamani, who was represented by ATCON Executive Secretary, Mr Ajibola Olude described the move as insensitive and irresponsible on the part of the government as it negates the policy of ease of doing businesses in Nigeria as well as the principles of taxation which includes – fairness, adequacy, convenience and efficiency.

“My suggestion to the government is that they should step the 5% excise duty rate. The ripple effect of this is that many of our youths will lose their jobs and will have crisis upon crisis in our country”. He lamented.