By Abdulfatah Babatunde
The Federal Government, on Tuesday, announced the removal of excise duty on the telecom sub-sector of Nigeria’s Digital Economy Industry.
Prof. Isa Pantami, Minister of Communications and Digital Economy, announced the removal at a press briefing on Tuesday in Abuja.
“This is in line with recommendations of the committee constituted to review applicability of the duty on telecom sector.
“The excise duty is additional overburden with taxation and sundry levies,” the minister said.
The ministry organised the press briefing to provide updates on the status of the five per cent excise duty.
The minister objected to the applicability of the new duty to the telecom sector in August 2022.
President Muhammadu Buhari suspended the application of the new duty in the telecom sector.
The President, thereafter, set up a Presidential Review Committee on Excise Duty in the Digital Economy Sector.
Pantami, who chaired the committee, said it had completed its national assignment and submitted its report to the President, justifying why the sector should be exempted.
The minister said the committee’s submissions were based on three arguments to justify why additional taxes or any levy should not be imposed on the telecom sector.
“First, the operators in the telecoms sub-sector currently pay 41 different categories of taxes, levies and charges.
“Telecoms has continued to be a major contributor to the Nigerian economy in terms of Gross Domestic Product Contribution (GDP).
“The third argument is the fact that, despite an increase in cost of production across sectors, the telecom sector is the only sector where the cost of service has been stable,” he said.
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“In many cases, the telecom subsector continued to go down over the past years and, therefore, adding more burden will destroy the sector,” Pantami said.
The minister also informed the gathering that the President, having looked into the arguments, and relying on the provision of Section 5 of the Nigerian 1999 Constitution, as amended, has therefore, exempted the telecom sector from the list of sectors to pay the excise duty.
The Finance Act of 2021 and other subsidiary legislations contains list of sectors to pay the excise duty.
All of these are not as superior as the Constitution, which permits the President to grant a such waiver.
“I am happy that the President has approved exemption of digital economy sector from the five per cent excise duty.
“This is because of the strong argument that additional burden on telecom sector will increase the sufferings of Nigerians.”
He assured telecom consumers, that the incoming administration would sustain the presidential exemption given to telecom sector.
“The decision by the President is not about political party or administration but about Nigeria and welfare of citizens.”
The digital economy sector, Pantami said, has continued to contribute to the growth of the Nigerian economy.
He said the sector has contributed 14.07 per cent to the GDP in the first quarter of 2020; 17.79 per cent in the second quarter of 2021; and 18.44 per cent in the second quarter of 2022.
He added that it also increased quarterly revenue from N51 billion to N480 billion, representing growth of 594 per cent.
The cost of buying data has also reduced from N1,200 in 2019 to N350 presently.
This is despite the increase in the cost of operations, he noted.
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