Treasury rakes in N631b tax revenue, angling for more
By Jeph Ajobaju, Chief Copy Editor
Information and Communications Technology (ICT) firms and consumers paid N631.09 billion tax to the federal treasury in 2022, as gleaned from National Bureau of Statistics (NBS) figures newly released.
This made ICT one of the biggest Value Added Tax (VAT) and Company Income Tax (CIT) contributors in 2022, a status the sector has retained for years, according to the NBS.
Telecom and other ICT consumers paid N268.84 billion consumption tax for services like calls, SMS, data, and more.
Telecom and other ICT players parted with N362.26 billion CIT. Abuja made a total N5.34 trillion from CIT and VAT, out of which ICT contributed 11.82 per cent.
The NBS breaks down ICT into activities of telecommunications and information services; publishing; motion picture; sound recording; and music production and broadcasting.
“In terms of sectoral contributions, the top three largest shares in Q4 2022 were manufacturing with 32.17 per cent; information and communication with 18.05 per cent and public administration and defence, compulsory social security with 9.87 per cent,” the NBS said, via reporting by The PUNCH.
For CIT, it explained “in terms of sectoral contributions, the top three largest shares in Q4 2022 were manufacturing with 31.20 per cent; financial and insurance activities with 12.96 per cent, and Information and communication activities with 12.77 per cent.”
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Growth of digital economy
Digital economy growth led by telecom has increased revenue for the government.
In 2022, the sector contributed N12.32 trillion to real Gross Domestic Product (GDP) and the total number of telecom subscriptions hit 222.23 million, per The PUNCH.
The growth of ICT has not been lost on the government, and with falling oil revenues, it has set out plans to ramp up taxes from the sector.
Abuja is currently adding a 5 per cent excise duty on telecom services, which will increase consumption tax from 7.5 per cent to 12.5 per cent.
But Communications and Digital Economy Minister Isa Pantami opposes the idea, arguing telecom is one of the few sectors contributing to the economy.
“The sectors that are contributing to our economy today are few. What we should be doing is ensuring that all other sectors can also contribute,” he said.
“A lot of sectors are consumers, these are the sectors that we should be tasked to contribute.
“A sector cannot be a consumer today; each sector must contribute a certain percentage to the economy. And if we fail to do that, we would be increasing the pressure and by doing that we would be destroying the digital economy sector.”
According to him, telecom firms already pay about 41 different taxes.
SBM Intelligence listed the taxes in a report titled ‘Taxing Nigeria’s subnational economies to oblivion’.
“At the federal level, telecommunications companies are expected to pay taxes such as Companies Income Tax; the Capital Gains Tax; Withholding Taxes; Stamp Duty; National Industrial Training Fund; Employees Compensation Scheme; the Tertiary Education Trust Fund; National Housing Fund contributions; Contributory Pension Schemes and customs duties,” the report said.
National Association of Telecoms Subscribers President Adeolu Ogunbanjo insisted “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?”