Telecom Subscribers Sue FG Over Tax

Telecommunication consumers under the aegis of the National Association of Telecoms Subscribers have dragged the Federal Government to court over its plan to implement a five per cent excise duty on telecom services.

According to the National President, NATCOMS, Adeolu Ogunbanjo, the suit is against the imposition and implementation of excise duty and the continued imposition and implementation of Value Added Tax on telecom services.

He stated that this suit was filed at the Federal High Court Ikoyi.

Confirming the development, Ogunbanjo said, “There are too many taxes on telecom service. Putting too many taxes on it is not fair. When you buy airtime, you pay VAT. Why are we still paying VAT for the services.”

The suit is praying the court to declare VAT on telecom services as unconstitutional and illegal, and declare the implementation of excise duty on telecoms as null and void.

A part of the suit read, “A declaration that the imposition and implementation of Value Added Tax on telecommunication services, as taxable services by Section 2 of the VAT ACT as amended, by the 7th – 9th Defendants and the imposition and implementation of Excise Duty on telecommunication services by Section 21(2) of the Excise Act as amended by Section 37 of the Finance ACT, by the 7th – 10th Defendants amount to double taxation on the plaintiff’s members, who are telecommunication services consumers or subscribers in Nigeria, and therefore unconstitutional, illegal, unfair and null and void.”

The suit listed the Attorney General of the Federation, the Minister of Finance, Budget and National Planning, Federal Inland Revenue Service, and the Nigerian Customs Service Board among the defendants.

In July, the Federal Government announced plans to implement a five per cent excise duty tax on telecom services.

According to the Minister of Finance Budget and National Planning, Zainab Ahmed, the tax will help boost the government’s revenue.

Speaking through the assistant Chief Officer of the ministry, Mr Frank Oshanipin, at an event organised by the Nigeria Communication Commission, she said, “The duty rate was not captured in the Act because it is the responsibility of the President to fix rate on excise duties and he has fixed five per cent for telecommunication services which include GSM.

“It is public knowledge that our revenue cannot run our financial obligations, so we are to shift our attention to non-oil revenue. The responsibility of generating revenue to run government lies with us all.”

In August, NATCOMS challenged the legitimacy of the proposed excise duty on telecoms services and vowed to go to court. At the time, the association argued that the introduction of the tax on telecom services meant consumers would have to pay a 12.5 per cent consumption tax despite weakening purchasing power.

In September, the Federal Government announced the suspension of the implementation of excise duty on telecom services. While announcing the suspension, the Minister of Communications and Digital Economy, Isa Pantami, said, “Excessive taxation has been a central challenge of the Information and Communications Technology sector.”

In December, a document titled, ‘Invitation to a One Day Public Hearing and Submission of Memoranda on the 2022 Finance Bill,’ released by the House of Representatives Committee on Finance, revealed that the government might be reconsidering the introduction of excise duty on telecom services.

The document read in parts, “Telecommunication services provided in Nigeria shall be charged with duties of excise at the rates specified under the duty column in the Schedule as the President may by Order prescribe pursuant to section 13 of this Act.”