Why FG suspends 5% excise duty on telecom services- Pantami


By Ismail Auwal

The Federal Government on Monday said it suspended the controversial 5% excise duty on telecommunication services in view of the negative effects it would have on the digital economy.

When announcing the suspension at the first meeting of the Presidential Committee on Excise Duty for the Digital Economy Sector in Abuja, Minister of Communications and Digital Economy Isa Pantami observed that the duty could upset the recorded progress in the sector if left unchecked.

He noted that the telecommunications industry is already overtaxed with 41 different excessive multiple taxes.

“Excessive taxation has been a central challenge of the Information and Communications Technology sector”, he said.

Pantami argued that it is unfair to overburden such a sector that is so central to the nation’s growth and development and mainly because the industry rarely receives subsidies which other sectors have enjoyed.

“Despite the spiralling inflation, and cost of production, particularly the energy factor, the network service providers have not increased prices of services. I challenge the Gentlemen of the press here to name one sector that has not witnessed price increases in services in the last three years. It is only in telecoms that prices have been stable”, he added.

The minister revealed that he has rebuffed attempts to raise the cost of telecommunication services more than 15 times.

He argued that excise duty in other countries is imposed on luxury products to reduce consumption, not on services like telecommunication that have become a necessity.

“Allow the prices of telecommunication services to increase with effects learning and business of the common men,” he said.

While outlining the responsibilities expected of the Presidential Committee on Excise Duty for the Digital Economy Sector, Pantami stated that the committee will assess the situation and advise the president on the best course of action.

Pantami, who inaugurated the Committee, which he chairs on the directive of President Muhammadu Buhari, with the Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed as a member, said the decision on the suspended policy will be made after the committee completes its report.

Other members of the committee inaugurated by Pantami, include the Executive Vice Chairman and Chief Executive Officer (EVC/CEO) of Nigerian Communications Commission (NCC), Prof. Umar Danbatta; the Executive Chairman of Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami; and the representatives of Mobile Network Operators (MNOs).
Pantami recalled several positive developments in the sector that needed to be sustained through support of the government.

Executive Vice Chairman of the NCC, Prof Danbatta, in his remarks, commended the Minister for the leadership and direction for the industry. “The Minister has been leading from the front, including this effort to ensure this meeting takes place. Accordingly, we will do our best to get the best out of this assignment to the benefit of Nigerian citizens.”

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