FG suspends 5% tax on telecoms call, data

The Minister of Communications and Digital Economy, Isa Pantami, on Monday, said the Nigerian government has suspended the proposed excise duty on telecommunication services.

Pantami, who announced the suspension at the inaugural meeting of the Presidential Committee on Excise Duty for the Digital Economy Sector in Abuja, said the telecommunications sector was already burdened by excessive and multiple taxes, PUNCH reports.

The Nigerian government through the Budget Office of the Federation had earlier revealed that it would begin the implementation of its proposed excise duties on telecommunication services and beverages in 2023.

It projected to generate well over N165 billion in one year from its proposed 5 per cent excise duty on telecommunications services like calls, data, SMS and others, in an effort to swell revenue from non-oil sectors.

However, Pantami has maintained that he is against the implementation of this tax, which would increase the cost of telecommunication services for Nigerians.

The proposal, was however, met with criticisms and wild rejection from telecommunications firms, who said they were already peppered by 38 existing taxes, with the latest one being the 39th.

Data from the Nigeria Communications Commission (NCC) showed that Nigerians and other nationals within Nigeria spent N3.25 trillion on airtime, data, and other telecommunication services in 2021, Daily Sun reports.

If the new rule had taken off last year as planned, the government would have netted N162.5 billion from the 5 per cent tax in one year.

Telecommunication subscribers in Nigeria spent at least N615.08 billion on calls and data in the first quarter of 2022, according to data from the financial statement of the MTN Nigeria Communications Plc and Airtel Nigeria.

This represents a 23.09 per cent increase from the N499.66 billion they made in the corresponding period of 2021.

The amount 9mobile and Globacom made from these revenue streams are not available as they are not publicly traded companies.

Meanwhile, according to data from the NCC, MTN and Airtel are the two major voice carriers in the nation.

In 2021, 173.56 billion minutes of calls were made in Nigeria, indicating a 15.07 per cent increase from the 150.83 billion minutes of calls that were made in 2020. The number of SMS sent increased by 15.06 per cent from 8.22 billion in 2020 to 9.46 billion in 2021.

The revenue was generated by operators in GSM, fixed wired, Internet service provision, value service added, collocation and infrastructure sharing, and other spaces.