ICT

5% Tax on Telcos: Minister Debunks FG’s Endorsement, Faults Alleged Fiscal Amendment

By Hillary Asemota

The Minister of Communications and Digital Economy, Prof. Ibrahim Pantami has debunked the document circulating on an online platform titled: Approval for the implementation of the 2023 fiscal policy measures and tariff amendments which is said to have emanated from a government institution. 

Pantami, said it has become expedient to clarify the public misconception and innuendos as contained in the circulating document.

In a statement signed by the SSA, Media and Spokesperson to the Minister, Mrs. Uwa Suleiman, said President Muhammadu Buhari, had on 21st March 2023, approved the exemption of the telecommunications sector from the proposed excise duty in line with the recommendations of the Presidential Review Committee on Excise Duty in the Digital Economy Sector.

According to Suleiman, the six-member Committee which was constituted at the behest of the Minister and approved by the President, was formally inaugurated on the 5th of September, 2022 and membership included; the Minister of Communications and Digital Economy as Chairman, Minister of Finance, Budget and National Planning, Chairman Federal Inland Revenue Service (FIRS), Executive Chairman Nigerian Communications Commission (NCC) as Secretary  and two representatives of the Mobile Network Operators (MN0s).

The Committee’s mandate, she added was to critically and objectively assess the potential effects on the economy, of an additional 5% Excise Duty tax charge on the Digital Economy Sector. 

The Spokesperson, said after 5 months of intensive and objective deliberations, the Committee submitted its report to the President precisely on the 13th of February 2023.

She said: “The report had recommended the exclusion of the proposed, and then suspended 5% excise duty  tax on the Digital Economy Sector, citing incontrovertible facts including; the unprecedented contribution of the sector to the nation’s Gross Domestic Product (GDP), the sustained quantum leap in government revenue which currently stands at a staggering N594 billion quarterly, its position as the baseline driver of innumerable businesses at the Micro, Medium and Small scale levels among others.

“The Committee further analyzed the existing forty-one (41) taxes, levies and charges already imposed on the sector and concluded that instead of burdening the sector with more taxes, concessions should be considered, in order to sustain its unprecedented contributions to the growth of the Nigerian economy.

“Based on the strength of its findings, the Committee prayed that the President exempts the Digital Economy Sector from the proposed additional Excise Duty.” Suleiman, stated.

The Minister categorically stated that besides overburdening the sector, imposing additional taxes to the sector will bring hardship to the citizens of the country and appealed to the President’s compassion in his decision.

She added that President Buhari approved the following prayer: The Government exempts the Digital Economy Sector from excise duty charges in order to sustain and enhance use of Digital Economy services and to further benefit from their positive impacts on the economy, explaining that the President’s approval, supercedes all other declarations regarding the issue and we stand by it. Any contrary proclamation should be disregarded by the general public, the statement reiterated.

She however, recalled that the Minister has vehemently opposed the proposed 5% Excise Duty for Telecommunications Services, on the grounds that it is unjustifiable, as it will be burdensome for the citizens of the country.

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