Wednesday, April 17, 2024

Buhari regime to impose another 5% tax on calls, data as Nigerians endure historic economic hardship

Telecoms operators described the new tax regime as a strange move and unusual development, saying they would have to pass the cost directly to subscribers.

• July 29, 2022
Finance, budget and planning minister Zainab Ahmed
Finance, budget and planning minister Zainab Ahmed

The Muhammadu Buhari regime has finalised plans to levy a five per cent Excise Duty on all telecommunications services, including calls, SMS, and data services, a move that would further compound Nigerians’ economic woes.

Finance Minister Zainab Ahmed shared the worrying news at a stakeholders’ forum organised by the Nigerian Communications Commission, NCC in Abuja on Thursday. Ms Ahmed said the decision was motivated by the federal government’s desperation to augment declining income from oil and gas.

 “The issue of revenue is not something that need to be shy away from, our revenue can no longer take care of our needs as a country,” Ms Ahmed asserted. “Also Nigeria is no longer making enough money in oil revenue hence the attention is shifting to non-oil revenue.”

Ms Ahmed, represented by Musa Umar, Assistant Director, Tax and Policy, urged stakeholders to support the implementation of the five per cent exercise duty on telecommunications services.

The minister defended the recently enacted tax by claiming that several African nations, including Malawi, Tanzania, Uganda, and others, have successfully tapped into this method of generating revenue.

She did however assure Nigerians, that the government is committed to implementing the regulation in a seamless manner that will not negatively impact Nigerians.

In response to the development, Engr Gbenga Adebayo, Chairman of the Association of Licensed Telecommunications Operators of Nigeria, ALTON, described the new tax regime as a strange move and unusual development.

He bemoaned that the newly imposed tax was a mishmash of 39 different taxes payable by the country’s telecom operators, implying that the new tax burden would be passed on to subscribers.

“It is a strange move, it appears a bit unusual. Excise duty is supposed to be apportioned to goods and products, but we are surprised this is on services,” he said.

 “We currently pay a lot of taxes, running into 39 of them, so we can’t add more to the our existing burden. We won’t be able to absolve this on behalf of subscribers. The five per cent excise duty will be paid by the subscribers. It will collected by the operators on all voice and data services including OTT and remitted to the Nigerians Customs”, he added. 

Peoples Gazette had in May reported that telecommunication companies under the aegis of ALTON  recommended an upward adjustment in call and SMS tariffs to cushion the increasing cost of operation in Nigeria.

The association claimed that the telecommunications industry had been financially harmed by an economic downturn that occured in 2020 and the ongoing Russia-Ukraine war.

They claimed the war had resulted in a 35 per cent increase in their operating expenses due to an increase in energy costs.

We have recently deactivated our website's comment provider in favour of other channels of distribution and commentary. We encourage you to join the conversation on our stories via our Facebook, Twitter and other social media pages.

More from Peoples Gazette

Katsina State

Politics

Katsina youths pledge to deliver over 2 million votes to Atiku

“Katsina State is Atiku’s political base because it is his second home.”

Foodstuff

Heading 1

FCCPC to intensify price monitoring in markets as naira appreciates against dollar

Mr Abdullahi said the operatives of FCCPC would work with trade associations, farmer groups, and other stakeholders to combat price-fixing and dismantle cartels.

Acting Inspector-General Olukayode Egbetokun

States

IGP Egbetokun approves area commands for Ifo, Imeko, Idi-Iroko in Ogun

We are not, however, going to stop at creating an area command in Ifo; we will also create two area commands in the border areas of Idi-Iroko and Imeko,” the IGP said.

Nigerian Exchange

Economy

NGX: Market capitalisation drops N1.1 trillion on sell-offs 

The market’s declining performance was driven by sell-offs in telecommunications heavyweights.

A COMPOSITE PHOTO OF MBAPPE AND SABITZER

Sport

PSG, Dortmund overcome home deficits to reach UCL semi-finals; Barcelona, Atletico beaten in Spain

Paris Saint-Germain and Borussia Dortmund are through to the semi-finals of the UEFA Champions League, while Barcelona and Atletico Madrid crashed out.

Motorists at fuel station

States

Motorists lament as long queues surface at fuel stations in Bauchi

Long queues have surfaced at filling stations across the Bauchi metropolis, signalling a scarcity of Premium Motor Spirit (PMS), otherwise called petrol.

Abubakar Kyari

Heading 5

Climate change reducing crop yields, increasing food prices: FG

He also said climate change had disrupted food supply chains, particularly in vulnerable regions with limited adaptive capacity.