The Federal Government of Nigeria through the Budget Office of the Federation has disclosed that it will begin the implementation of its proposed excise duties on telecommunication services and beverages in 2023.
This is in spite of criticism from the Nigerian Manufacturers Association and Communications and Digital Economy Minister Isa Pantami.
Africa Today News, New York had earlier reported that Pantami had during the maiden edition of the Nigerian Telecommunications Indigenous Content Expo organised by the Nigeria Office for Developing the indigenous Telecom Sector, frowned on the five per cent tax on telecoms services. He said, ‘The Ministry of Communications and Digital Economy is not satisfied with any effort to introduce excise duty on telecommunication services.
‘Beyond making our position known, we will go behind the scenes and go against any policy that will destroy the digital economy sector. We will go to any extent to legitimately and legally defend its interest.’
The Budget Office of the Federation, which is domiciled in the Ministry of Finance, Budget, and National Planning, revealed its plan in its ‘2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper,’ which was released on Friday.
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The ministry claims that this was done in an effort to increase its non-oil revenue sources. The minister added that the introduction of the telecoms service tax was projected to result in an exponential increase in excise duty collections.
The government stated that the NCS would develop frameworks for recovering duties, taxes, and relevant fees from transactions made over electronic networks when discussing the tax, which is the responsibility of the Nigeria Customs Service.
The office listed the full implementation of excise duty on telecom services, alcoholic, sugar-sweetened beverages, cigarettes, and tobacco items as one of the techniques that will be used to boost Customs’ revenue collections for the period of 2023–2025.
“Therefore, excise revenue is expected to grow exponentially because of the introduction of the telecom service charge and SSBs”
It explained that the law now empowered the FIRS to appoint anyone as its agent to withhold or collect VAT and remit same to the service.
Stating the government’s plight, the budget office said, “Revenue generation remains the major fiscal challenge of the Federal Government.
‘The systemic resource mobilisation problem has been compounded by recent economic recessions. Recognising that domestic revenue mobilization is important for sustainable development, the Federal Government has instituted the Strategic Revenue Growth Initiatives to improve government revenue and entrench fiscal prudence, with emphasis on achieving value for money.
‘These measures include improving the tax administration framework, including tax filing and payment, as well as the introduction of new and/or further increases in existing pro-health taxes like excise on sugar-sweetened beverages, tobacco, and alcohol. Mixed reactions have greeted the implementation of these measures.’
Speaking at a stakeholders’ forum on the implementation of excise duty on telecommunications services in Nigeria, the Minister of Finance Budget and National Planning, Zainab Ahmed, who spoke through Assistant Chief Officer of the Ministry, Mr Frank Oshanipin, said, “The duty rate was not captured in the Act because it is the responsibility of the President to fix rate on excise duties and he has fixed five per cent for telecommunication services which include GSM.