The Federal Government has suspended the proposed five percent excise duty on telecommunications services in the country.
The duty was to be collected by the Nigeria Customs Service on behalf of the government. It was to be imposed on services such as the internet, telephone calls, short messaging services SMS, among others.
The Federal Ministry of Finance, Budget and National Planning has been pushing for the tax based on the passage of an enabling Act by the National Assembly.
But critical stakeholders in the telecoms sector had kicked against it, describing it as draconian and insensitive.
The Minister of Communications and Digital Economy, Prof Isa Pantami, who announced the suspension, said it was informed by the need for the stakeholders to look critically at developments in the industry in order not to over-burden the sector with more taxes.
Pantami spoke during the Inaugural meeting of the Presidential Committee on Excise Duty on the Digital Economy Sector at the Digital Economy Complex, Mbora, Abuja.
He said within the past few years, he had resisted attempts to increase taxes in the sector about 15 times, noting despite this the telecommunications sector remains the backbone of the economy with MTN alone paying over N757 billion in 2021 as taxes to the Federal Inland Revenue Service (FIRS).
Pantami said he had briefed Presidential Muhammadu Buhari on happenings in the telecommunications sector and the need to sustain the unprecedented achievements recorded, rather than cripple them with fresh taxes.
He explained that it was on that basis the President approved the Committee to be established with himself as Chairman and the Minister of Finance, Budget and National Planning, the Chairman of the FIRS, the Executive Vice Chairman of the Nigerian Communications Commission, and the representatives of Mobile Network Operators as members, while the Committee could accommodate more members as necessary.
The Minister also noted that the Digital Economy Sector has contributed more to the nation’s Gross Domestic Product (GDP) over the years with the latest being the 18.44 percent contribution in Q2 of 2022.
He said the Committee has been mandated to be fair and objective to all stakeholders with a view to advising the President appropriately while he remains the eyes of President in the sector and the Committee.