Finance, Budget and National Planning Minister Zainab Ahmed has drawn a battle line with her communication and digital economy counterpart, Isa Ali Pantami, over the expected perception of increased 5% rate on internet data and phone calls.
Against Pantami’s threats to stop the implementation of the tariff increase on telecom consumers, saying it will undermine the growth of the sector, the finance minister said the government was moving forward to implement implement the new rate hike, regardless of opposition. She said the 5% hike was included in the 2020 finance law, but was never implemented.
The Minister of Finance made the remarks during a stakeholder meeting organized by the Nigerian Communications Commission (NCC). She was represented by her ministry’s deputy director of fiscal policy, Musa Umar. “From now on, the 5% excise duty will be collected by telecom operators and remitted to the federal government on a monthly basis, no later than the 21st of each month,” the minister said yesterday.
Pantami had rejected the planned implementation of a 5% excise duty in the Nigerian telecommunications sector. He voiced his disapproval of the policy at a telecommunications forum in Lagos organized by the Nigerian Office for the Development of the Indigenous Telecommunications Sector (NODITS), an agency domiciled at the Nigerian Communications Commission (NCC).
He said he would explore all legitimate means to stop the planned 5% excise tax on telecom consumers, blaming the timing and process of imposing the tax on the telecom industry, insisting on the fact that part of responsive government’s responsibility was not to increase the challenges facing citizens.
“I have not been contacted officially. If we are, we will surely state our case. The sector that contributes to the economy must be encouraged. You are introducing excise duties to discourage luxury goods like alcohol , but broadband in the telecom sector is a necessity,” he said at the meeting in Lagos.
But the finance minister said Pantami cannot claim to be absent from the set of processes that culminated in the finance law, which is a product of both the National Assembly and the Federal Executive Council (FEC). .
Ahmed said Pantami was involved in drafting the finance law which spells out the said excise duty hike policy. Therefore, “he obviously could not have had a point in his ‘dissenting opinions’ even if the National Assembly could not have contradicted itself on this question, because the parliament had passed the finance bill before President Muhammadu Buhari does not sign it,” she said. said.
Ms Ahmed said the federal government had introduced “telecommunications services” under the finance law.
Nigeria is one of the largest telecommunications markets in Africa. The available report from the NCC indicates four categories of operators, namely mobile operators (GSM), fixed operators (fixed/fixed wireless), Internet service providers (ISPS) and others (non-telephone operators). mobile and fixed, ISPs).
The number of subscribers continues to grow significantly, from approximately 180 million subscribers in 2019 to more than 200 million active subscriptions in 2020. This represents an increase of more than nearly 11% in the total number of subscriptions . In addition, many sub-Saharan African countries such as Tanzania, Uganda, Malawi, Kenya, Rwanda, Ghana and Burundi currently impose excise duties on telecommunication services ranging from 5 to 20 %.
The excise duty on telecommunication services provided in Nigeria introduced by the Finance Act 2020 with statutory enactment on 1 January 2021 has yet to be implemented to date.
The government said the delay was to take into account the need to ensure a reasonable transition period before the new tax is implemented, as well as to provide clarity to all stakeholders on how to implement it. .
The Minister of Finance claimed that she had, through a circular dated March 1, 2022, informed the Nigeria Customs Service (NCS) and other Heads of Ministries, Departments and Agencies (MDAs), including the Federal Ministry Communication and Digital Economy, Buhari’s approval of the implementation of the 5% excise duty on telecommunication services as of June 1, 2022.