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FG Suspends 5% Telecoms Tax

FG Suspends 5% Telecoms Tax

Oghenevwede Ohwovoriole in Abuja

The federal government has suspended the implementation of the proposed five per cent telecommunications tax.

The Minister of Communications and Digital Economy, Isa Pantami announced this on Monday during the inaugural meeting of the Presidential Committee on Excise Duty for the Digital Economy Sector, in Abuja.

Explaining the suspension of the contentious tax which the minister himself had publicly criticised, he said the telecoms sector is already overburdened by excessive and multiple taxation.

He said: “It is because of this the president has granted my prayers. Number one– immediate suspension of excise duty in the digital economy sector, and number two, he approved that a committee be constituted to look into the matter carefully and advise him accordingly. This committee is to be chaired by the Minister of Communications and Digital Economy. 

“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.”

He told the committee how he had explained to the president the likely effects of the suspended tax on the telecoms sector.

Pantami  said: “Of recent, it was announced that some of our respected brothers and sisters (government officials), kickstarted the process of introducing excise duty in the telecom sector in which there and then, (based on the constitution and being the representative of President Buhari) in the sector, I rejected that wholeheartedly 

“Being the representative of the president, I formalised my position and explained to him in a letter that could be referred to as a petition, reasons (excise duty is usually fixed on luxury products).

“I told the president (in the letter) that if care is taken that attempt will destroy the digital economy sector that is becoming the backbone of our economy.

“Despite our achievements, we have been recording some challenges in the sector and if care is not taken, these challenges could be a barrier in the development of the sector in the next few years to come.

“But as of today, the ICT sector is over- burdened by so many categories of taxes to the extent that today there are 41 categories of taxes at the federal and state levels, particularly in the telecom sector. Some at federal level and some at state level. 

“Besides, these multiple taxes (the same taxes being collected at the federal) are also what the states are insisting should be paid to them. If care is not taken, this is what will jeopardise the achievements and gains that we have recorded so far in the sector.”

Pantami noted that prices of products and services in other sectors have increased significantly but the prices of products and services in the telecom sector have not increased significantly in the last three years. 

He noted that the Mobile Network Operators (MNOs) have been coming with many initiatives asking the regulator to allow them review their prices upward,   

taking into considerations things outside the sector like petroleum products, exchange rate, inflation, devaluation of the currency, among others

The minister stated that whenever the regulator, Nigerian Communications Commission (NCC) brought the matter to me, he had always encouraged and urged them to try and persevere with the little profit they are making as the current economic situation in Nigeria does not give room to continue adding burden on the poor citizens. 

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