5% Telecoms Tax: Pantami opposes FG 

The Ministry of Communications and Digital Economy has opposed the Federal Government’s proposal to impose a 5% excise duty on the telecoms sector. 

How can the Ministry oppose the same government it is part of? 

Well, that’s the part that is not clear on the matter. It had been disclosed last week that the government was considering a 5% tax on telecommunications products – calls, SMS, and data usage. But on Monday at a forum organised in Lagos by the Nigeria Office for Developing Indigenous Telecoms Sector (NODITS), an agency domiciled in the Nigeria Communications Commission (NCC), the Minister of Communications and Digital Economy, Prof. Isa Pantami, expressed opposition to the proposed tax. 

His reasons? 

The Minister argues that the time is not right for such a plan, considering the current tough economic condition of Nigerians, insisting that a responsive government should be more concerned about easing the burden of citizens, not adding to it. Also faulting the process of the plan, Pantami said, “I have not been contacted officially. If we have, we surely will state our case. The sector that contributes to the economy should be encouraged. You introduce excise duty to discourage luxury goods, like alcohol. (But) broadband is a necessity!” 

Who is behind the plan, if the sector’s Minister has not been contacted? 

It appears that the proposed tax originated from the Ministry of Finance, Budget, and National Planning. Representing the Minister of Finance, Budget and National Planning, Zainab Ahmed, the ministry’s Assistant Director, Tax and Policy, Musa Umar, argued for the implementation of the 5% excise duty on telecommunications services. The tax is said to be one of the ways the ministry is exploring boosting revenue generation for the government. 

“The issue of revenue is not something we need to shy away from. Our revenue can no longer take care of our needs as a country. Also, Nigeria is no longer making enough money in oil revenue, hence the attention is shifting to non-oil revenue sectors”, Umar said. Stakeholders in the sector have also expressed opposition to the plan, and have said that the 5% tax if implemented by the government, would be passed to subscribers.