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Buhari To Impose Further 5% Tax On Calls, Data

In a move that would exacerbate Nigerians’ financial difficulties, the Muhammadu Buhari administration has finalized plans to impose a 5% Excise Duty on all telecommunications services, including calls, SMS, and internet services.

On Thursday in Abuja, the Nigerian Communications Commission, NCC, held a stakeholders’ session where Finance Minister Zainab Ahmed presented the troubling information. Ms. Ahmed claimed that the federal government’s desperate attempt to boost falling oil and gas revenue was what drove the decision.

“The issue of revenue is not something that needs to be shy away from, our revenue can no longer take care of our needs as a country,” Ms Ahmed asserted. “Also, Nigeria is no longer making enough money in oil revenue hence the attention is shifting to non-oil revenue.”

Ms. Ahmed pleaded with stakeholders to facilitate the application of the 5% exercise duty on telecommunications services through Musa Umar, Assistant Director, Tax and Policy.

The minister argued that other African countries, like Malawi, Tanzania, Uganda, and others, have effectively tapped into this strategy of producing revenue in order to defend the recently adopted tax.

She did tell Nigerians, nevertheless, that the administration is dedicated to putting the regulation into effect smoothly so as not to harm Nigerians.

READ MORE: FG To Launch Grants For Vulnerable People

Engr Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria, ALTON, responded to the event by describing the new tax regime as an odd action and uncommon development.

Insinuating that the new tax would be passed on to subscribers, he decried the fact that it was a patchwork of 39 distinct taxes that the nation’s telecom carriers had to pay.

“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,” he said.

 “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 absolve this on behalf of subscribers. The five per cent excise duty will be paid by the subscribers. It will collected by the operators on all voice and data services, including OTT and remitted to the Nigerians Customs,” he added.

To offset the rising cost of operating in Nigeria, telecommunications businesses operating under the auspices of ALTON advocated raising calls and SMS charges.

The group asserted that the ongoing Russia-Ukraine war and the 2020 economic slowdown both have a negative financial impact on the telecommunications sector.

They claimed that as a result of rising energy prices brought on by the war, their operating costs had increased by 35%.

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Adoga Stephen
Adoga Stephen is a trained journalist, researcher, creative writer and freelancer. He studied Mass Communication at the Lagos State University of Science and Technology (then Laspotech) and acquired requisite skills for the practice of journalism, a profession he has been practicing since 2016.

In a move that would exacerbate Nigerians’ financial difficulties, the Muhammadu Buhari administration has finalized plans to impose a 5% Excise Duty on all telecommunications services, including calls, SMS, and internet services.

On Thursday in Abuja, the Nigerian Communications Commission, NCC, held a stakeholders’ session where Finance Minister Zainab Ahmed presented the troubling information. Ms. Ahmed claimed that the federal government’s desperate attempt to boost falling oil and gas revenue was what drove the decision.

“The issue of revenue is not something that needs to be shy away from, our revenue can no longer take care of our needs as a country,” Ms Ahmed asserted. “Also, Nigeria is no longer making enough money in oil revenue hence the attention is shifting to non-oil revenue.”

Ms. Ahmed pleaded with stakeholders to facilitate the application of the 5% exercise duty on telecommunications services through Musa Umar, Assistant Director, Tax and Policy.

The minister argued that other African countries, like Malawi, Tanzania, Uganda, and others, have effectively tapped into this strategy of producing revenue in order to defend the recently adopted tax.

She did tell Nigerians, nevertheless, that the administration is dedicated to putting the regulation into effect smoothly so as not to harm Nigerians.

READ MORE: FG To Launch Grants For Vulnerable People

Engr Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria, ALTON, responded to the event by describing the new tax regime as an odd action and uncommon development.

Insinuating that the new tax would be passed on to subscribers, he decried the fact that it was a patchwork of 39 distinct taxes that the nation’s telecom carriers had to pay.

“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,” he said.

 “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 absolve this on behalf of subscribers. The five per cent excise duty will be paid by the subscribers. It will collected by the operators on all voice and data services, including OTT and remitted to the Nigerians Customs,” he added.

To offset the rising cost of operating in Nigeria, telecommunications businesses operating under the auspices of ALTON advocated raising calls and SMS charges.

The group asserted that the ongoing Russia-Ukraine war and the 2020 economic slowdown both have a negative financial impact on the telecommunications sector.

They claimed that as a result of rising energy prices brought on by the war, their operating costs had increased by 35%.

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