Ahmed adamant on taxes despite heavy pushback
By Jeph Ajobaju, Chief Copy Editor
Muhammadu Buhari’s tax Czar, Finance Minister Zainab Ahmed, is insisting on imposing new taxes on telephone usage and beverages from 2023 in the face of heavy pushback from a fellow member of the cabinet, industry, and consumers.
Ahmed reiterated the tax last week at a stakeholders’ forum on the implementation of excise duty on telecom services to raise treasury revenue.
And the Budget Office she superintends has followed up on enforcing the tax on telecom services and beverages despite backlash from Communications and Digital Economy Minister Isa Pantami and the Manufacturers Association of (MAN).
“The Ministry of Communications and Digital Economy is not satisfied with any effort to introduce excise duty on telecommunication services.
“Beyond making our position known, we will go behind the scenes and go against any policy that will destroy the digital economy sector. We will go to any extent to legitimately and legally defend its interest,” Pantami argued.
He made the point at the maiden edition of the Nigerian Telecommunications Indigenous Content Expo organised by the Nigeria Office for Developing the indigenous Telecom Sector.
__________________________________________________________________
Related articles:
Telcos groan under 40 different taxes causing poor service
MAN warns Sugar Tax will slash output, revenue
Abuja’s tax plan stokes fear of business closures, job losses
__________________________________________________________________
Domestic revenue mobilisation
The Budget Office under the Ministry of Finance, Budget and National Planning, disclosed its plan in its “2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper” released on 5 July.
“Full implementation of excise duty on telecom services, alcoholic, sugar-sweetened beverages, cigarettes and tobacco products.
“Therefore, excise revenue is expected to grow exponentially because of the introduction of the telecom service charge and SSBs,” the Budget Office said in the document, per The PUNCH.
The documented reiterated the law empowers the Federal Inland Revenue Service (FIRS) to appoint anyone as its agent to withhold or collect Value Added Tax (VAT) and remit it to the FIRS.
“Revenue generation remains the major fiscal challenge of the Federal Government. The systemic resource mobilisation problem has been compounded by recent economic recessions.
“Recognising that domestic revenue mobilisation is important for sustainable development, the Federal Government has instituted the Strategic Revenue Growth Initiatives to improve government revenue and entrench fiscal prudence, with emphasis on achieving value for money.
“These measures include improving the tax administration framework, including tax filing and payment, as well as the introduction of new and/or further increases in existing pro-health taxes like excise on sugar-sweetened beverages, tobacco, and alcohol. Mixed reactions have greeted the implementation of these measures.”
Opposition from industry
The MAN has expressed opposition to the tax on alcoholic and non-alcoholic beverages, saying it will hurt the industry.
The treasury will generate N160.46 revenue yearly from the 12.5 per cent excise duty on telecom services if implemented from 2023.
But Association of Licensed Telecom Owners of Nigeria (ALTON) Chairman Gbenga Adebayo warned consumers would bear the tax burden as mobile networks are already reeling from multiple taxes.
“There is ample time to continue to advocate against it before then. They are set to implement and impoverish more people on their way out,” said National Association of Telecoms Subscribers (NATS) President Adeolu Ogunbanjo.
“It is unfortunate that despite [Pantami’s] resentment, they are still going ahead. Why appoint the Minister at all? Ministers are to advise the President on matters that are within their purview.
“They shouldn’t implement it, otherwise, Nigerians will react to this insensitive nature of the government. Let them look to other sectors, why telecoms?
“We will mobilise Nigerians to go against this.”
