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Minister Insists Telecom Sector Exempted From 5% Excise Duty Tax

Minister Insists Telecom Sector Exempted From 5% Excise Duty Tax

The Minister of Communications and Digital Economy, Professor Isa Ali Ibrahim (Pantami) has insisted that the exemption of the Telecommunications Sector from the proposed 5 per cent excise duty in line with the recommendations of the Presidential Review Committee on Excise Duty in the Digital Economy Sector still subsists.

The minister also assured telecoms operators that the president’s approval on tax exemption still stands.

A statement issued on Wednesday by Mrs. Uwa Suleiman, Spokesperson to the Minister of Communications & Digital Economy, assured “the telecommunications sector and the general public that the President’s approval, supersedes all other declarations regarding the issue and we stand by it.

“Any contrary proclamation should be disregarded by the general public.”

Recall, Business Remarks reported that the new Fiscal Policy Measures for 2023 via a Circular dated 20 April 2023, and signed by the Minister of Finance, Budget and National Planning, Zainab Ahmed revealed that the government was set to proceed with the implementation of the five per cent excise duty on telecom services.

The circular was shared on Linkedin by the Fiscal Policy Partner and Africa Tax Leader, PwC, Taiwo Oyedele. The circular was coded HMFBNP/MDAs/CIRCULAR/2023 FP/04 and titled ‘Approval for the Implementation of the 2023 Fiscal Policy Measures and Tariff Amendments.’

Also Read: Update on 5% Excise Duty on Telecoms Services

It stated that the president, Major General Muhammadu Buhari (retd), has approved the implementation of the 2023 Fiscal Policy Measures.

The new fiscal policy measures (FPM) imposes a 5 percent excise duty on mobile telephone services (GSM), fixed telephone, and internet services — postpaid and prepaid.

The statement reads in part;

“The six-member Committee which was constituted at the behest of the Minister and approved by the President, was formally inaugurated on the 5th of September, 2022 and membership included; the Honourable Minister of Communications and Digital Economy as Chairman,  Honourable Minister of Finance, Budget and National Planning, Chairman Federal Inland Revenue Service (FIRS), Executive Chairman Nigerian Communications Commission (NCC) as Secretary  and two representatives of the Mobile Network Operators (MN0s). The Committee’s mandate was to critically and objectively assess the potential effects on the economy, of an additional 5% Excise Duty tax charge on the Digital Economy Sector.

“After five months of intensive and objective deliberations, the Committee submitted its report to the President precisely on the 13th of February 2023. The report had recommended the exclusion of the proposed, and then suspended 5% excise duty  tax on the Digital Economy Sector, citing incontrovertible facts including; the unprecedented contribution of the sector to the nation’s Gross Domestic Product (GDP), the sustained quantum leap in government revenue which currently stands at a staggering Five Hundred and Ninety four Billion Naira quarterly, its position as the baseline driver of innumerable businesses at the Micro, Medium and Small scale levels among others.

“The Committee further analyzed the existing forty one (41) taxes, levies and charges already imposed on the sector and concluded that instead of burdening the sector with more taxes, concessions should be considered, in order to sustain its unprecedented contributions to the growth of the Nigerian economy. Based on the strength of its findings, the Committee prayed that the President exempts the Digital Economy Sector from the proposed additional Excise Duty”, he said.

Pantami further emphasized that besides overburdening the sector, imposing additional taxes to the sector will bring hardship to the citizens of the country and appealed to the President’s compassion in his decision.

About Bukola Olanrewaju

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