In a recent announcement, the Minister of Communications and Digital Economy, Prof. Isa Ali Pantami, has revealed that President Muhammadu Buhari has approved the exemption of the 5% excise duty for the telecommunication sector, which was previously introduced by the Federal Ministry of Finance.
The decision was made by the Presidential Committee, which was set up last year to review the introduction of the Excise Duty.
The tax was introduced based on the report on 41 multiple taxes and levies, which the telecoms service providers in the industry paid. The Ministry of Finance had earlier introduced the 5% Excise Duty for the telecoms sector last year, but it was refuted by the Minister of Communication and Digital Economy, who claimed that the tax would be too tough on the service providers in the telecom sector, considering the multiple taxes and levies, which have already been imposed on the sector.
He also argued that other critical stakeholders were not consulted before the decision was made.
The Presidential Committee, which completed its report in the first week of February 2023, invited other stakeholders before submitting its report. After the review, the committee reported that there was no need for Excise Duty in the ICT sector, the reason being that the sector is already paying 41 categories of charges and levies and has been contributing significantly to the economy already.
The committee cited two African countries that increased their excise duty in the ICT sector, which led to a collapse of the sector in those countries.
The Executive Vice Chairman of the Nigerian Communications Commission, Prof. Umar Dambatta, also applauded the Minister and President for the initiative, stating that the decision made by the Presidential review committee on Excise Duty is a good step towards sustainable growth in the country’s telecom sector.
He also advised telecom consumers who have complaints about the services provided by network providers to make their complaints to the NCC.
In conclusion, the exemption of the 5% excise duty for the telecom sector is a positive development for the industry and the country’s economy. It is a significant move towards encouraging growth and development in the sector while reducing the financial burden on the telecoms service providers.