Phone users to pay new tax worth N150b as treasury scrambles for more funds
By Jeph Ajobaju, Chief Copy Editor
Abuja has imposed a new 5 per cent tax on telephone subscribers for calls, text messages, and data use, raising to 12.5 per cent total levy on telecom services, with the new tariff expected to fetch N150 billion for the treasury yearly.
Finance Minister Zainab Ahmed explained at a stakeholders’ forum organised by the Nigeria Communication Commission (NCC) in Abuja that a 5 per cent excise duty had been in the finance Act 2020 but was not implemented.
Ahmed, represented by the Assistant Chief Officer of the Ministry, Frank Oshanipin, said the implementation was delayed because the government was engaging with stakeholders.
“Payments are to be made on monthly basis, on or before 21st of every month. 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,” she said.
“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.’’
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Consumers to bear tax burden
Association of Licensed Telecom Owners of Nigeria (ALTON) Chairman Gbenga Adebayo insisted the tax would be passed on to consumers who will bear the burden, per reporting by Nairametrics.
“It means that subscribers will now pay 12.5 per cent tax on telecom services, we will not be able to subsidise the 5 per cent excise duty on telecom services.
“This is as a result of the 39 multiple taxes we already paying coupled with the epileptic power situation as we spend so much on diesel.’’
ALTON Executive Secretary Gbolahan Awonuga warned the excise duty is not healthy for the industry as service providers are already paying multiple taxes.
“We pay 2 per cent excise duty to NCC from our revenue, 7.5 per cent VAT and other 39 taxes. We are going to pass it to the subscribers because we cannot subsidise it.’’
Treasury anticipates N150b from the levy
President Muhammadu Buhari approved in May the collection of 5 per cent tax on telephone recharge cards and vouchers as part of new items on the list of goods liable for excise duty. The treasury hopes to raise at least N150 billion from the tax yearly.
Excise duty is a levy on good at the time of manufacture.
It is also a form of indirect tax on the sale or consumption of certain goods, products, services or activities such as tobacco, alcohol, narcotics, gambling, et cetera, mainly to discourage their use and consumption.
Finance Act 2022 extended the list to include beverages, non-alcoholic drinks, and other goods.