As part of its desperation to shore up its revenue base, the Federal Government is on course to implement a new tariff hike on data and calls. The Minister of Finance, Budget, and National Planning, Zainab Ahmed, stated this on Thursday in Abuja.
This is in addition to the existing 7.5 percent Value Added Tax (VAT), paid for goods and services across all sectors of the economy.
According to her, this will start with the implementation of a percent excise duty tax on all voice calls, SMS, and data services.
Confirming this move, Yunusa Tanko Abdullah, the minister’s Special Adviser, Media & Communications, in a statement said the government made the disclosure on five percent excise duty during a stakeholders’ meeting, organised by the Nigerian Communications Commission (NCC), the telecoms industry regulator.
“At that meeting, Mrs. Zainab Ahmed, Honourable Minister of Finance, Budget and National Planning, who was represented by the Assistant Director, Tax Policy, Federal Ministry of Finance, Budget and National Planning, Musa Umar, noted: ‘The five percent excise duty has been in the Finance Act 2020, but has never been implemented. Henceforth, the five percent excise duty will be collected by telecom operators and payment made to the federal government on a monthly basis, on or before 21st of every month,’” the statement read further.
“Henceforth, the five percent excise duty will be collected by telecom operators and payment made to the federal government on a monthly basis, on or before 21st of every month.”
Against the comments by Prof. Isa Ali Pantami, Honourable Minister of Communication and Digital Economy, concerning the five percent excise duty hike on telecoms services, it is worth noting that there was a circular stating the planned hike which was addressed to the communication minister and other relevant ministries and agencies of government.
The circular Referenced No. F. 17417/VI/286 dated 1st March 2022, and titled “Approval for Implementation of the 2022 Fiscal Policy Measures and Tariff Amendments” was addressed to different Ministers, including Honourable Minister, Communications and Digital Economy and other heads of government agencies.
The circular was addressed to The Secretary To The Government of The Federation, Attorney-General of The Federation, Ministers of Industry, Trade and Investment, Agriculture and Rural development, Mines and Steel and Development.
Others are Ministers of Health, Aviation, Information And Culture, Budget And National Planning.
Other heads of agencies copied in the circular are Accountant-General of the Federation, Comptroller-General of Customs, Governor of the Central Bank of Nigeria, Executive Chairman of the Federal Inland Revenue Service and the Director-General of the Raw Materials Research and Development Council.
Others are the Executive Secretary of Nigerian Export Promotion Council (NEPC) and the Executive Secretary of the Nigerian Investment Promotion Commission.
Part of the circular reads: “This is to convey that his Excellency Mr. President has approved Supplementary Protection Measures (SPM) for implementation of ECOWAS Common External Tariff (CET) 2022-2026 and excuse duties on non-alcoholic beverage, cigarettes and Tobacco products as well as telecommunication services with effects from 1st April 2022.
The circular signed by Mrs. Ahmed reads: “A grace of ninety (90) days commencing from the date of implementation of this circular i.e April 1, 2022, shall be granted to all importers who had opened Form M and must have entered into irrevocable trade agreement before the coming into effect of this circular to process and clear these goods at the prevailing duty rates.
“However new import transaction entered from the 1st of April 2022 will be subjected to the new import duty regime,” she said.
Recall that the Finance Act, 2020 introduced ‘Telecommunication Services’ provided in Nigeria to be liable to excise duty under Section 21 (2) of the Customs and excise tariff etc. (Consolidation) Act, CAP. C49, LFN 2004.
It, therefore, means that all stakeholders have by that singular provision been aware of the Act.
The excise duty on telecommunication services provided in Nigeria introduced through the Finance Act, 2020 with statutory enactment on 1st January, 2021 is yet to be implemented till date.