The Federal Government has disclosed that telecommunications subscribers would pay a five percent tax on calls, SMS, and data services.
Meanwhile, stakeholders in the industry have expressed dissatisfaction over the government’s resolve to implement a five percent excise duty on all telecommunications services in Nigeria.
Speaking in Abuja yesterday at the Stakeholders Consultative Forum on Implementation of Excise Duty, the Executive Secretary, Association of Telecommunications Companies of Nigeria (ATCON), Ajibola Olude, said taking cognizance of the hardship in Nigeria at a time like this, the government should rescind its decision to implement the five percent excise duty on telecommunications operators.
He said the government should channel its resources to other sectors to diversify the economy.
“What I am saying is that the proposed excise duty on all telecommunications companies is badly intended by the Ministry of Finance and National Planning and Nigeria Customs. And the current state of Nigerian communication is so bad that only about 756 Internet Service Providers (ISPs) were registered but only 10 are active because of forex issues. Since it is coming from the Ministry of Finance, I think they should understand that currently Nigeria is faced with inflationary pressure, which is 18 percent now. If you add this increase, the level of inflationary pressure will come to 19 or 20 percent. And this will further increase the level of poverty in the country. So, if you are going to pass this to Nigerians that are already burdened by the hardship in the country, this is not the best time to do so.
“For me, it is not something they should embark upon. It is something they should turn down and leave the country as it is. Nigerians won’t be able to pay for this.
“And another direct effect is that it will lessen investment. The Foreign Direct Investment (FDI) or Capital Importation will go down because this is a further leakage. It is not just good and I think the best thing the government should do is to develop other sectors.
“They have been collecting tax from the people, they should channel it to the steel industry, manufacturing, and so many other sectors. That is diversification of funds. It is not something they should implement now. They should consider it and change their decision,” he said.
On his part, the Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, insisted that the new tax burden would be passed to subscribers.
According to him, “it is a strange move, it appears a bit unusual. Excise duty is supposed to be apportioned to goods and products, but we are surprised this is on services. We will continue to support the government but ALTON won’t be able to subsidize this on behalf of subscribers in addition to the 7.5 percent VAT, making it 12.5 percent payable by subscribers to the Federal Government.
“We currently pay a lot of taxes, running into 39 of them, so we can’t add more to the existing burden. We won’t be able to absorb this on behalf of subscribers.”
Speaking at the event, the Minister of Finance, Budget, and National Planning, Mrs. Zainab Ahmed, urged stakeholders to support the implementation of the five percent excise duty on telecommunications services.