FG’s Reversal of 5% Tax will Avert Planned Hike in Telecoms Tariff, Say Operators

Emma Okonji with agency report

Telecommunications operators (Telcos) have said the removal of the five per cent excise duty on telecoms operations by the federal government was a great relief for both the telecoms operators and subscribers as it will avert the planned hike in tariff.

Speaking to THISDAY in separate interviews, officials of the Association of Licensed Telecoms Operators of Nigeria (ALTON) and those of the Association of Telecoms Companies of Nigeria (ATCON), said the five per cent tax removal would save the sector from the planned tariff hike.

Chairman of ALTON, Gbenga Adebayo, told THISDAY that the recent announcement by President Bola Ahmed Tinubu on the suspension of five per cent excise duty on telecoms was a great relief to the sector.

“The suspension is a good development for telecoms subscribers and the telecoms industry. The Nigerian public should be grateful to the current government for being brave enough to suspend the five per cent excise duty on telecoms. As operators, we had been instructed to collect the tax from telecoms’ subscribers and remit it to the federal government, but with the suspension order, operators will no longer collect such tax and the subscribers will be free from the tax burden,” Adebayo said.

ALTON and ATCON, the two leading industry groups also told Technology Times that the removal of a five per cent tax on telecom operations would save phone subscribers in Nigeria from tariff hikes.
According to the groups, President Tinubu’s suspension of a five per cent excise duty on the telecoms industry has saved phone subscribers in Nigeria from tariff escalation.      

President Tinubu, penultimate week, announced the suspension of the five per cent excise duty tax on telecoms services, thus bringing the controversy about the implementation of the tax to an end.

The five per cent excise duty is one of the 39 taxes imposed on telecoms operations across networks by the federal government last year and revisited in April this year, after agitations from telecoms industry stakeholders, who initially rejected it because they considered it as part of multiple taxes that would negatively impact on telecoms subscribers.

The federal government had said it would begin the implementation of a five per cent excise duty on all voice calls, SMS, and data services, insisting that the five per cent excise duty has been in the Finance Act 2020 but has never been implemented.