FG removes excise duty for telecoms services

The Federal Government has announced the abolition of customs duties for the telecommunications sub-sector of the Nigerian Digital Economy Industry in line with the recommendations of the Committee formed to review the application of Duties to the telecommunications sector which is considered to be overloaded with taxes and miscellaneous. levy.

Minister of Communication and Digital Economy, Prof. Isa Ali Ibrahim Pantami, disclosed this on Tuesday at a press conference in Abuja. The briefing was organized to give an update on the status of the five percent excise duty, which was applied to the telecommunications sector rejected by the Minister in August 2022, after President Muhammadu Buhari suspended the application to the telecommunications sector and set the President. Review Committee on Customs in the Digital Economy Sector.

Pantami, who is the Chairman of the Committee, specifically set up for the purpose of reviewing the proposed customs duty in the telecommunications sector, said the Committee is carrying out a national duty and will submit a report to the President, justifying why the sector should be implemented. exempt.

The Minister said that the Committee’s submission can be summarized in three arguments presented to justify why additional burdens in the form of taxes or at any level should not be imposed on the telecommunications sector to prevent the reversal of the important contribution made by the sector. of the Nigerian economy.

“Our justification is based on three grounds: First, is the fact that operators in the telecommunications subsector of the digital economy industry currently pay no less than 41 different categories of taxes, levies and fees; secondly, that telecommunications continues to be a major contributor to the Nigerian economy in terms of Contribution to Gross Domestic Product (GDP).

“The third reason for opposing Customs duties in the telecommunications sector is the fact that, despite the increase in the cost of all factors of production in all sectors, and naturally increasing the cost of products and services, the telecommunications sector is a sector that only costs. services have stabilized and in many cases continue decreased over the past year and therefore, adding another burden will harm the sector,” said the Minister.

The Minister also told the meeting that the President, after looking at the arguments presented by the Committee and relying on the provisions of Section 5 of the Nigerian Constitution 1999, as amended, therefore, the telecommunications sector is exempted from the list of sectors to pay excise duty as stated in the Act Finance 2021 and other supplementary regulations, all of which are not superior to the Constitution which allows the President to grant such exemptions.

Pantami said: “I am happy to report to you that President Muhammadu Buhari, GCFR, has approved the exemption of the digital economy sector from the five percent customs duty payable and this is due to the strength of the arguments presented to him. The committee that the additional burden on the telecommunications sector will increase the suffering Nigeria and other sectors that do not contribute much to the economy should be challenged to do more and pay the five percent excise tax.

The minister assured Nigerians, who are telecommunications consumers, that the presidential exemption granted to the telecommunications sector will be implemented by the incoming administration as “the President’s decision is not about any political party or administration, but about Nigeria and the welfare of Nigerians. .”

The Minister further noted that the Digital Economy Sector continues to contribute significantly to Nigeria’s economic growth, contributing 14.07 percent to GDP in the first quarter of 2020; 17.79 percent in the second quarter of 2021; and 18.44 percent in the second quarter of 2022.

He said the sector has also increased the monthly revenue for the government from N51 billion to over N480 billion. The increase represents a growth of 594 percent; while the cost of purchasing data has also decreased from N1,200 in 2019 to N350 today, despite the increase in operating costs, including energy challenges that have led mobile network operators to power base stations with more than 32,000 power plants to provide smooth. service to consumers teeming that.