FG On Course To Implement New Tariff Hike On Data, Calls – Minister
The Federal Government has stated that it is on course to implement a new tariff of a five per cent hike on data and calls.
The government through the Ministry of Finance, Budget, and National Planning disclosed this, saying it would begin the implementation of a five percent excise duty tax on all voice calls, SMS, and data services, in addition to the existing 7.5 percent Value Added Tax (VAT), paid for goods and services across all sectors of the economy.
The government made the disclosure on five percent excise duty during a stakeholders’ meeting, organised by the Nigerian Communications Commission (NCC).
This was contained in a statement by the minister’s Special Adviser, Media & Communications, Yunusa Tanko Abdullahi.
At the meeting, Mrs. Zainab Ahmed, Honourable Minister of Finance, Budget and National Planning, who was represented by the Assistant Director, Tax Policy, Federal Ministry of Finance, Budget and National Planning, Musa Umar, noted: “The five percent excise duty has been in the Finance Act 2020, but has never been implemented.
“Henceforth, the five percent excise duty will be collected by telecom operators and payment made to the federal government on a monthly basis, on or before 21st of every month.”
The statement added that against the comments by Prof. Isa Ali Pantami, Honourable Minister of Communication and Digital Economy, concerning the five percent excise duty hike on telecoms services, it is worth noting that there was a circular stating the planned hike which was addressed to the communication minister and other relevant ministries and agencies of government.
“The circular Referenced No. F. 17417/VI/286 dated 1st March 2022, and titled “Approval for Implementation of the 2022 Fiscal Policy Measures and Tariff Amendments” was addressed to different Ministers, including the Honourable Minister, Communications and Digital Economy, and other heads of government agencies.
“The circular was addressed to The Secretary To The Government of The Federation, Attorney-General of The Federation, Ministers of Industry, Trade and Investment, Agriculture, and Rural Development, Mines and Steel and Development.
“It, therefore, means that all stakeholders have by that singular provision been aware of the Act.
“The excise duty on telecommunication services provided in Nigeria introduced through the Finance Act, 2020 with statutory enactment on 1st January 2021 is yet to be implemented till date.
“This is considering the need to ensure reasonable transition period before the implementation of the new tax, as well as providing clarity to all stakeholders on implementation modalities.
“As a matter of emphasis, Mrs. Ahmed had vide Circular dated 1st March 2022 informed the Nigeria Customs Service (NCS) and other heads of government ministries, departments, and agencies (MDAs), including the Federal Ministry of Communication & Digital Economy about Mr. President’s approval of the implementation of the five percent excise duty on telecommunication services with effect from 1st June 2022.
“The circular provided a 90-day moratorium with effect from 1st March 2022 before the implementation of the excise tax. Currently, the excise tax is yet to be implemented.
“An issue as serious as the excise tariff cannot be taken single-handedly, as all stakeholders and agencies have been involved including Manufacturers Association of Nigeria (MAN) and Association of Telecom Operators of Nigeria (ALTON), who wrote to the Ministry to be involved in the modalities for implementation of the excise duty.”
Nigeria is one of the largest telecommunication markets in Africa. Available report from the NCC shows four categories of operators, i.e. mobile (GSM), fixed telephony operators (fixed/ fixed wireless), internet service providers (ISPS), and others (operators other than mobile & fixed telephony, ISPs).
The subscriber number continues to grow substantially, having increased from about 180 million subscribers in 2019 to over 200 million active subscriptions in 2020. This represents an increase of over nearly 11 percent in total subscriptions.