FG set to implement new tariff hike on data, calls ― Minister
•Says circular already issued on planned increase •Implementation in line with Finance Act to drive revenue growth.
By: Naijaspies.com
12/8/2022
At
that meeting, Mrs Zainab Ahmed, 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 per cent excise duty has been in the Finance Act
2020, but has never been implemented.
“Henceforth, the five per
cent 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.”
Yunusa
Tanko Abdullahi, Special Adviser, Media & Communications to the
Minister said in a press statement that “against the comments by Dr Isa
Ali Pantami, Minister of Communication and Digital Economy, concerning
the five per cent 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 the 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, and; 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. According to Yunusa, 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 excise 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 transactions 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 to date.
This is considering the need to ensure
a reasonable transition period before the implementation of the new
tax, as well as providing clarity to all stakeholders on implementation
modalities.
He noted that as a matter of emphasis, Mrs Ahmed had
vide Circular dated 1st March, 2022 informed the Nigeria Customs Service
(NCS) and other heads of government ministries, departments and
agencies (MDAs), including the Federal Ministry of Communication &
Digital Economy about Mr President’s approval of the implementation of
the five percent excise duty on telecommunication services with effect
from 1st June, 2022. The circular provided a 90-day moratorium with
effect from 1st March, 2022 before the implementation of the excise tax
and currently, the excise tax is yet to be implemented.
“An issue
as serious as the excise tariff cannot be taken single-handedly, as all
stakeholders and agencies have been involved including Manufacturers
Association of Nigeria (MAN) and Association of Telecom Operators of
Nigeria (ALTON), who wrote to the Ministry to be involved in the
modalities for implementation of the excise duty.
“Also recall
that recently, Dr Pantami rejected the planned implementation of five
per cent excise duty in the Nigerian telecoms sector.
“He
expressed his disapproval of the policy at a telecom forum in Lagos,
organised by the Nigeria Office for Developing the Indigenous Telecoms
Sector (NODITS), an agency domiciled in the Nigeria Communications
Commission (NCC).
“He said that he would explore every legitimate
means to stop the planned five per cent excise duty tax on telecom
consumers, faulting the timing and process of imposing the tax on the
telecom industry, insisting that part of the responsibility of a
responsive government was not to increase the challenges citizens were
facing”, Yunusa further stated. “I have not been contacted officially.
If we are, we surely will state our case. The sector that contributes to
the economy should be encouraged. You introduce excise duty to
discourage luxury goods like alcohol, but broadband in the telecom
sector is a necessity,” he quoted Pantami as saying.
Continuing,
Mrs Ahmed said “In view of the above position of Dr Pantami, there could
be the question whether he was absented in the whole processes that
resulted in the Finance Act, which is a product of both the National
Assembly and Federal Executive Council (FEC).
“Suffice this to
say that before the Act, the Finance Bill would have been through the
FEC of which Dr Pantami is a member and the National Assembly. In other
words, he was involved in the making of the Finance Act which spells the
said excise tariff hike policy. Therefore, he could not obviously have
had a point in his dissenting views even as the National Assembly could
not have contradicted itself on this matter, because the parliament had
passed the Finance Bill before President Muhammadu Buhari signed it into
law”.
She noted that although Nigeria is celebrated as the
largest economy in Africa, translating this wealth into revenues remains
a challenge.
“Considering this in line with the provision of the
revised National Tax Policy which provides the framework for a
sustainable tax system that would ensure reliable sources of revenue to
government and support economic development. “Subsequently, in line with
the Finance Act, the federal government 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.”
Mrs Ahmed said Nigeria is one of the largest
telecommunication markets in Africa, and available report from the NCC
shows four categories of operators, i.e. mobile (GSM), fixed telephony
operators (fixed/ fixed wireless), internet service providers (ISPS) and
others (operators other than mobile & fixed telephony, ISPs).
Subscriber
number, she noted, continues to grow substantially, having increased
from about 180 million subscribers in 2019 to over 200 million active
subscriptions in 2020.
This, Mrs Ahmed reiterated represents an
increase of over nearly 11 per cent in total subscriptions, explaining
that moreover, many countries in sub-Saharan Africa such as Tanzania,
Uganda, Malawi, Kenya, Rwanda, Ghana and Burundi currently impose excise
duty on telecommunication services ranging between five per cent to 20
per cent.
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