The Minister of Communications and Digital Economy, Prof. Isa Pantami, has flawed Federal Government’s to impose additional five percent tax on telecommunication services in the country.
Pantami, who expressed his stance on the tax at the maiden edition of the Nigerian Telecommunications Indigenous Content Expo organised by the Nigeria Office for Developing the indigenous Telecom Sector, in Lagos, said his ministry was not consulted on the new tax which he said would suppress growth recorded in the sector.
The minister’s reaction came barely a few days after the Minister of Finance Budget and National Planning, Mrs. Zainab Ahmed, announced additional tax at a stakeholders’ forum on the implementation of excise duty on telecommunications services in Nigeria
When implemented, the excise duty would increase tax on telecommunication services to 12.5 percent.
Pantami said: “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 rule-making is to invite stakeholders to make contributions, I was not consulted officially. Secondly, if we have been contacted, we would have challenged the submission.
“The sectors that are contributing to our economy today are few. What we should be doing is to ensure that all other sectors can also contribute. 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.
“Excise duty is introduced to discourage the consumption of certain commodities like alcohol, and tobacco. But today, without broadband penetration, how can you perform financial transactions, how can you deliver lectures without that, how can you work in a hospital, these services are a necessity”, the minister added.
While pointing out that telecom companies pay two percent excise duty to the NCC, while telecom consumers also contribute 7.5 percent for using the service, Pantami argued that government ought to diversify its revenue portfolio in a manner that would not tamper with growth in the sector.
He elaborated: “We will make further steps to fight it. As a minister, based on the provision of the constitution of Nigeria, section 148, we are exercising the powers of Mr. President.
“That is what the constitution says. At least, I am a major stakeholder. When the 7.5 percent VAT was added, I was not consulted, I only heard the announcement. And I think there is something questionable, and I am glad that we are on the same page with our National Assembly members here, they were not consulted, and they are part of the committees.
“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 added.