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Telecommunications Exempted from the 5% Tax Policy – Pantami

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CEM REPORT, TELECOMMUNICATION | The Telecommunications Industry have been excluded from the 2023 Fiscal Policy Measures and Tariff Amendments.

According to the Ministry of Communications and Digital Economy, telecommunications services have been exempted from the proposed and recently approved five per cent tax by the president to sustain and enhance the use of digital economy services.

The ministry said the exemption of the sector was approved by President Muhammadu Buhari following recommendations of the Presidential Review Committee on Excise Duty in the Digital Economy Sector.

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Minister of Communications and Digital Economy, Isa Pantami in a statement signed by his spokesperson, Uwa Suleiman, called upon Nigerians and players of the digital economy to disregard the policy.

“The government exempts the digital economy sector from excise duty charges in order to sustain and enhance the use of digital economy services and to further benefit from their positive impacts on the economy.”

“The office of the Honourable Minister of Communications and Digital Economy, hereby assures the sector and the general public that the President’s approval supersedes all other declarations regarding the issue, and we stand by it. Any contrary proclamation should be disregarded by the general public.”

According to the statement a six-member Committee was constituted at the request of the Honourable Minister and approved by the President. The Committee’s mandate was to critically and objectively assess the potential effects on the economy, of an additional five per cent excise duty tax charge on the digital economy sector.

Suleiman added that the committee was formally inaugurated on September 5, 2022 noting that it presented its recommended after five months of intensive and objective deliberations to the President precisely on February 13, 2023.

“The six-member Committee which was constituted at the behest of the Honourable Minister and approved by the President was formally inaugurated on the 5th of September, 2022 and membership included; the Honourable Minister of Communications and Digital Economy as Chairman, Honourable Minister of Finance, Budget and National Planning, Chairman Federal Inland Revenue Service (FIRS), Executive Chairman Nigerian Communications Commission (NCC) as Secretary and two representatives of the Mobile Network Operators (MN0s). The Committee’s mandate was to critically and objectively assess the potential effects on the economy, of an additional 5% excise duty tax charge on the digital economy sector.”

“After five months of intensive and objective deliberations, the Committee submitted its report to the President precisely on the 13th of February 2023. The report had recommended the exclusion of the proposed, and then suspended 5% excise duty tax on the Digital Economy Sector, citing incontrovertible facts.”

Pantami in the statement said that the committee highlighted several contributions of the sector to the nations economy and presented to the president.

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He also added that the sector already pays 41 taxes and levies noting that additional taxies will slow the growth and contribution of the industry.

“citing incontrovertible facts including; the unprecedented contribution of the sector to the nation’s Gross Domestic Product (GDP), the sustained quantum leap in government revenue which currently stands at a staggering Five Hundred and Ninety four Billion Naira quarterly, its position as the baseline driver of innumerable businesses at the Micro, Medium and Small scale levels among others.

“The Committee further analyzed the existing forty one (41) taxes, levies and charges already imposed on the sector and concluded that instead of burdening the sector with more taxes, concessions should be considered, in order to sustain its unprecedented contributions to the growth of the Nigerian economy. Based on the strength of its findings, the Committee prayed that the President exempts the Digital Economy Sector from the proposed additional Excise Duty.”

The Minister further emphasized that besides overburdening the sector, imposing additional taxes on the sector will bring hardship to the citizens of the country.

Recall that Pantami kicked against the proposed five per cent excise duty for telecommunications services on the grounds that it was unjustifiable and would be burdensome for the citizens of the country whenitwas first announced last year.

He promised to mediate with the presidency to ensure the sector was overburden with taxes that could slow or halt the digital economy road map.

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