Suspension of 5% Excise Duty, Respite for Telecom Subscribers, Says ALTON

Emma Okonji

The Association of Licensed Telecom Operators of Nigeria (ALTON) has said the recent suspension of the planned imposition of five per cent excise duty on telecom services by the federal government is a great relief for telecom subscribers who have been overburdened with multiple taxes.

Chairman of ALTON, Mr. Gbenga Adebayo, who spoke to THISDAY in a telephone interview, said available statistics suggested that if there was further tax on telecom services, it would hamper affordability of services.

“So the decision to suspend the planned five per cent tax on telecom services by the federal government is a welcome development and government must be commended for that. It shows government is sensitive to the concerns of telecom subscribers who bear the brunt of multiple taxes, because they pay every imposed tax from their meagre salaries. As telecom operators, we see the suspension as a respite for telecom subscribers because it will relieve them of additional burden of taxes that had always reduced the value of telecom services. We are hoping that the committee set up by the federal government to review the policy on five per cent excise duty on telecom services, will have good reasons to advise government to completely drop the policy,” Adebayo said.

The federal government, through the Federal Ministry of Finance, Budget and National Planning, had last month, notified the telecom sector of the intention of government to introduce five per cent excise duty on telecom operations, in addition to the 7.5 per cent Value Added Tax(VAT) that all sectors of the economy pay for goods and services rendered.

Worried about the proposed plan, industry stakeholders vehemently opposed it and called on the federal government to rescind such plan, while describing it as another form of tax in addition to existing taxes in the telecom sector.

The Minister of Communications and Digital Economy, Dr. Isa Ibrahim Pantami, who also faulted the timing and process of imposing the five per cent tax on the telecom sector, insisted that part of the responsibility of a responsive government was not to increase the problems of the citizens through all manners of taxes.

Pantami said the policy could have the potential to impact very negatively on the digital economy sector, and particularly, telecommunication, which is already overburdened with a plethora of taxes totalling about 41 categories.  

In a view to addressing subscribers’ agitation, the federal government, on Monday, suspended the proposed five per cent excise duty on telecom services and inaugurated a committee chaired by Pantami, to immediately review the policy.