FG imposes 5% excise duty on calls, data as oil revenues shrink

The federal government has concluded plans to impose another five per cent Excise Duty on all telecommunications services, including calls, SMS, and data services.

Zainab Ahmed, minister of finance and national planning disclosed this at a stakeholders’ forum organised by the Nigerian Communications Commission, NCC in Abuja on Thursday.

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,” she said. “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, 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 absorb 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.