The Minister of Communications and Digital Economy, Prof. Isa Pantami has adduced three reasons why the federal government decided to exempt telecom services providers from paying the 5 percent excise duty.
The three reasons, according to the Minister are the fact that operators in the telecoms sub-sector of the digital economy industry currently pay no fewer than 41 different categories of taxes, levies and charges.
Others are telecoms has continued to be a major contributor to the Nigerian economy in terms of Gross Domestic Product Contribution (GDP), and despite the increase in the cost of all factors of production across sectors, and naturally leading to an increase in costs of products and services, telecom sector is the only sector where the cost of service has been stable and in many cases continued to go down over the past years and therefore, adding more burden will destroy the sector.
Pantami had yesterday at a press briefing organised to provide updates on the status of the 5 percent excise duty, announced the removal of excise duty for telecom sub-sector of Nigeria’s Digital Economy Industry in line with the recommendations of the Committee it constituted to review the applicability of the Duty to the telecom sector which is considered already overburdened with taxation and sundry levies.
He noted that having looked into the arguments put forward by the Committee and relying on the provision of Section 5 of the Nigerian 1999 Constitution, as amended, has therefore, exempted telecom sector from the list of sectors to pay the excise duty as stated in Finance Act of 2021 and other subsidiary legislations, all of which are not as superior as the Constitution which permits the President to grant a such waiver.
“I am happy to report to you that President Muhammadu Buhari, GCFR, has approved the exemption of the digital economy sector from the five percent excise duty to be paid and this is because of the strength of the argument presented to him by the Committee that additional burden on telecom sector will increase the sufferings of Nigerians and that other sectors that are not making as much contribution to the economy should be challenged to do more and pay the 5 percent excise duty,” he said.
The Minister assured Nigerians, who are telecom consumers, that the presidential exemption given to the telecom sector shall be sustained by the incoming administration as “the decision by the President is not about any political party or any administration but about Nigeria and welfare of Nigerian citizens.”
