Communications and Digital Economy Minister Isa Pantami yesterday announced that the Federal Government has suspended its planned implementation of the five per cent tax on telecommunications services.
Pantami’s announcement came barely a month after stakeholders, including Mobile Network Operators (MNOs), subscribers’ groups – National Association of Telecom Subscribers (NATCOMS) and Association of Telephone, Cable TV and Internet Subscribers of Nigeria (ATCIS) (MNOs) kicked against the idea.
They said it would be one tax too many for operators who have more than 41 levies and dues to pay to the three tiers of government.
The tax on voice calls and text messages (Short Message Services), among others, was to be imposed on behalf of the Federal Government by the Nigeria Customs Service (NCS) government.
The Federal Ministry of Finance, Budget and National Planning had pushed for the implementation of the tax based on the passage of a law by the National Assembly.
Announcing the suspension yesterday, Pantami said the step was informed by the need for stakeholders to critically look at developments in the industry so as not to over-burden the sector with taxes.
Reacting to the tax early last month, Pantami said: “I have not been contacted officially. If we are, we surely will state our case. The sector that contributes to the economy should be encouraged. You introduce excise duty to discourage luxury goods like alcohol. Broadband is a necessity.
“If you look at it carefully, the sector contributes two per cent excise duty, 7.5 per cent VAT to the economy and you want to add more.”
Noting that complicating the citizens’ hardship cannot be tolerated, the minister said he had urged the tax masters to expand the scope of other sectors that are not contributing to the economy to do so.
He said: “We must come together and salvage the sector. Only the telecom sector contributed 13 per cent and you want to add more.”
Speaking at the inaugural meeting of the Presidential Committee on Excise Duty on the Digital Economy Sector at the Digital Economy Complex, Abuja in his capacity as chairman, Pantami said that within the past few years, he had resisted attempts to increase taxes in the sector for about 15 times.