Telecom users have voiced their displeasure at the Federal Government’s insistence on levying an excise fee on telecommunications services.
As a result, the users announced they would fight the idea in court during the first week of 2023 under the auspices of the National Association of Telecoms Subscribers of Nigeria (NATCOMS).
Deolu Ogunbanjo, president of NATCOMS, verified this in an interview with The Guardian yesterday. He emphasized that before the Federal Government showed up to reignite the proposal to impose the tax on consumers, the subject had been placed on hold.
Ogunbajo claimed that aside from the telecom industry, there are other industries where the federal government could generate revenue.
“They want to kill the sector that is already over burdened with various forms of taxes, close to 40 of them. We will not allow this to stand. We are going to court in the first week of 2023.”
In fact, word spread last week that the Federal Government was rethinking the suspension of the excise levy on telecom services. Operators would be required to increase call and data rates under the scheme.
This information was derived from the House of Representatives Committee on Finance’s invitation to a public hearing and request for memos regarding the 2022 Finance Bill.
It suggested that the 2022 Finance Bill, which is presently before the National Assembly, would include the temporarily suspended excise levy on telecom services once more.
The amount of the excise duty that would be imposed was not specified in the text. The committee said that it was holding a public hearing on the 2022 Finance Bill and that discussing telecoms as one of the goods subject to excise duty was one of the issues on the agenda.
Part of the document reads: “Telecommunication services provided in Nigeria shall be charged with duties of excise at the rates specified under the duty column in the Schedule as the President may by Order prescribe pursuant to section 13 of this Act.”
It added all telecommunication services in Nigeria shall be charged with duties of excise at “the rates specified under the duty column in the schedule as the President may by order prescribe pursuant to section 13 of this Act”
In order to avoid placing an undue emphasis on levying duties on the telecoms sector, the bill states that the amendment was required. It also notes that this would remove the restriction on the types of services that may be subject to excise duty.
The proposed excise levy on telecom services was justified, according to the document, by the need to generate more money and administer taxes.
Keep in mind that the Federal Government announced intentions to impose a 5% excise levy on telecom services in July. At a forum hosted by the Nigerian Communications Commission, Zainab Ahmed, the minister of finance, budget, and national planning, made this announcement. She said that the excise tax was included in the 2020 Finance Act, but had been implemented.
Frank Oshanipin, the ministry’s assistant chief officer, represented Ahmed when he said this: “Payments are to be made on a monthly basis, on or before the 21st of every month.”
“The duty rate was not captured in the Act, because it is the responsibility of the president to fix rates 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.”
As a result, there was friction in the industry, and Prof. Isah Pantami, Minister of Communications and Digital Economy, opposed the imposition of excise taxes on the telecoms sector. He believed that the tax would have an adverse effect on the industry and consumers.
“The Ministry of Communications and Digital Economy is not satisfied with any effort to introduce excise duty on telecommunication services.”
“Firstly, I have not been consulted officially and part of the rulemaking is to invite stakeholders to make contributions. I was not consulted officially. Secondly, if we have been contacted, we would have challenged the submission.”