Treasury anticipates N160.5b yearly from phone tax

With new tax, phone users will pay more

Treasury anticipates N160.5b yearly all things being equal

By Jeph Ajobaju, Chief Copy Editor

Up to N160.5 billion may be generated for the treasury yearly when the federal government begins to implement its 5 per cent excise duty on telecom services from 2023, but the amount could be more or less, depending on 2022 factors.

Figures released by the Nigerian Communications Commission (NCC) show mobile telephone networks, fixed wired operators, and internet service providers (ISPs) made a combined N3.21 trillion revenue in 2021.

A 5 per cent excise duty on that is N160.5 billion.

Finance Minister Zainab Ahmed disclosed the tax at a stakeholders’ forum on the implementation of excise duty on telecom services to raise treasury revenue.

“The duty rate was not captured in the [2022 Finance] 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,” Ahmed said through the Ministry’s Assistant Chief Officer, Frank Oshanipin,

Association of Licensed Telecom Owners of Nigeria (ALTON) Chairman Gbenga Adebayo riposted consumers will bear the tax burden.

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Pantami against phone tax

Ahmed said the tax would be implemented but Communications and Digital Economy Minister Isa Pantami has announced his opposition to it and that he would everything to stop its implementation, per Nairametrics reporting.

Pantami argued the telecom industry is already paying a lot of taxes and attempts to stretch it would have negative repercussions.

“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 said.

He bared his mind at the maiden edition of the Nigerian Telecommunications Indigenous Content Expo organised by the Nigeria Office for Developing the Indigenous Telecom Sector.

Association of Telecommunications Companies of Nigeria (ATCON) Chief Operating Officer Ajibola Olude also expressed doubt about the tax.

He said: “I don’t see the federal government implementing the five per cent excise duty. The Minister for Communications and Digital Economy faulted the plan saying it didn’t follow due process.

“There are laid-down rules before implementing that 5 per cent excise duty.

“Another reason why I don’t see it being implemented is because of the current macroeconomic factors in the country. Prices have not been stable, if they implement it, it will lead to an upsurge in crimes.”

Jeph Ajobaju:
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