The Federal Government has suspended the proposed excise duty on telecommunication services.
The suspension was announced by the Minister of
Communications and Digital Economy, Isa Pantami, 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.