Telecom users have voiced their displeasure at the Federal Government’s insistence on levying an excise fee on telecommunications services.
As a result, the users under the auspices of the National Association of Telecoms Subscribers of Nigeria (NATCOMS) announced they would fight the idea in court during the first week of 2023.
Deolu Ogunbanjo, president of NATCOMS, verified this in an interview on Tuesday.
He emphasised that before the Federal Government showed up to reignite the proposal to impose the tax on consumers, the subject had been placed on hold.
Ogunbajo claimed that aside from the telecom industry, there are other industries where the federal government could generate revenue.
“They want to kill the sector that is already overburdened with various forms of taxes, close to 40 of them.
“We will not allow this to stand. We are going to court in the first week of 2023.”
The Federal Government was rethinking the excise levy it had previously suspended on telecom services as reported last week.
The measure would require operators to raise call and data rates.
This information was gleaned from the memos that were submitted and the invitation to a public hearing that was sent out by the House of Representatives Committee on Finance.
It suggested that the 2022 Finance Bill, which is currently before the National Assembly, would once again include the excise charge on telecom services that had been suspended.
The amount of the excise duty that would be imposed was not specified in the text.
The committee said that it was holding a public hearing on the 2022 Finance Bill and that discussing telecoms as one of the goods subject to excise duty was one of the issues on the agenda.
Part of the document reads: “Telecommunication services provided in Nigeria shall be charged with duties of excise at the rates specified under the duty column in the Schedule as the President may by Order prescribe pursuant to section 13 of this Act.”
It was stated that all telecommunication services in Nigeria will be subject to excise taxes at “the rates listed under the duty column in the schedule as the President may by order prescribe pursuant to section 13 of this Act.”
In order to avoid placing an undue emphasis on levying duties on the telecoms sector, the bill states that the amendment was required.
It also notes that this would remove the restriction on the types of services that may be subject to excise duty.
The proposed excise levy on telecom services was justified, according to the document, by the need to generate more money and administer taxes.
In July, the Federal Government announced plans to impose a 5% excise fee on telecom services.
This was revealed at a seminar hosted by the Nigerian Communications Commission by Zainab Ahmed, Minister of Finance, Budget, and National Planning.
The excise duty, in her opinion, was included in the 2020 Finance Act but had not yet been put into effect.
Payments must be made on a monthly basis, on or before the 21st of every month, according to Ahmed, who spoke through the Assistant Chief Officer of the ministry, Frank Oshanipin.
“The duty rate was not captured in the Act, because it is the responsibility of the president to fix rates on excise duties and he has fixed five per cent for telecommunication services, which include GSM.
“It is public knowledge that our revenue cannot run our financial obligations, so we are to shift our attention to non-oil revenue.”
This created tension in the industry with the Minister of Communications and Digital Economy, with Prof. Isa Pantami kicking against the implementation of excise duty on the telecoms sector.
According to him, the tax would impact the sector and consumers negatively.
“The Ministry of Communications and Digital Economy is not satisfied with any effort to introduce excise duty on telecommunication services.
“Firstly, I have not been consulted officially and part of the rulemaking is to invite stakeholders to make contributions.
“I was not consulted officially. Secondly, if we have been contacted, we would have challenged the submission.”