The Federal Government on Monday announced the suspension of its proposed 5% excise duty on telecommunication services with effect from the 2023 fiscal year.
The Minister of Communications and Digital Economy, Prof Isa Pantami, announced the suspension in Abuja during the inaugural meeting of the Presidential Committee on Excise Duty for the Digital Economy Sector, stressing that the sector is already overtaxed.
According to him, the suspension of the tax is sequel to the petition he sent to President Muhammadu Buhari over the long term effect of the tax if implemented.
Pantami explained that the President decided to suspend the tax and ordered that a committee should be set up to critically appraise the implications of the tax for the economy and appropriately advise the president.
Pantami expatiated: “It is because of my intervention that the President granted my prayers. He not only granted immediate suspension of the excise duty in the digital economy sector, but also approved that a committee be constituted to look into the matter carefully and advise accordingly.
“The president has appointed me to be his eyes and ears in the sector and it is my responsibility to ensure we are just and fair to the operators, government and most importantly our people that are the consumers,” the minister added.
He listed that members of the committee as including himself as chairman while the Minister of Finance and National Planning, Chairman Federal Inland Revenue Services (FIRS), Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC) and Representatives of all the telecom companies in Nigeria are members.
Reacting to suspension of the 5% excise duty , Chairman of the Association of Licensed Telecommunication Operators in Nigeria (ALTON), Engr Gbenga Adebayo, said the decision by the President was a victory for the subscribers who would have been overburdened by the propsed tax.
He said: “The news of the suspension is well received. It shows that the government is listening to the complaints of the people and is always ready to do everything to increase penetration.
“If the tax remained, the burden will be passed on to the subscribers and that would have put untold hardship on them. It is actually a victory for them. I want the government to listen more and take decisions that will improve our quest to be a digital economy. More of these types of decisions will show Nigeria is ready to use ICT to build the economy”, the industry expert added.
It would be recalled that Pantami had kicked against the excise duty announced by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, a few weeks ago, who claimed that it was part of the provisions of the Finance Act 2020, which had not been implemented.
The Minister of Communications and Digital Economy pointed out that if the provisions in the Act were implemented, the excise duty on telecom services would rise to 12.5 per cent.
He maintained that the National Assembly members were not consulted and promised to “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.”
Apparently jolted by Pantami’s opposition to the proposed tax, Mrs. Ahmed accused him of sabotaging government’s efforts, adding that he cannot claim ignorance of a policy approved by the Federal Executive Council (FEC).
She said: “In view of the position of Prof. Pantami, there could be the question whether he was absented in the whole processes that resulted in the Finance Act, which is a product of both the National Assembly and Federal Executive Council.
“Suffice this to say that before the Act, the Finance Bill would have been through the FEC of which Prof. Pantami is a member and the National Assembly.
“In other words, he was involved in the making of the Finance Act which spells the said excise tariff hike policy”, the finance minister added.
