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FG to implement five percent tariff hike on calls, data

The Federal Government has vowed to go ahead with the planned implementation of a five percent hike in call and data tariff.

A statement from the Federal Ministry of Finance Budget and National Planning maintained the tariff hike will go on despite resistance from Minister of Communication and Digital Economy Prof. Isa Ali Pantami.

The statement insisted the government will begin “the implementation of five percent excise duty tax on all voice calls, SMS and data services, in addition to the existing 7.5 percent Value Added Tax (VAT), paid for goods and services across all sectors of the economy”.

Minister of Finance Budget and National Planning Mrs Zainab Ahmed made the disclosure at a stakeholders’ meeting organised by the Nigerian Communications Commission (NCC), the telecoms industry regulator.

Ahmed, who was represented by the Assistant Director, Tax Policy, Federal Ministry of Finance, Budget and National Planning, Musa Umar, said: “Henceforth, the five percent 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.”

Reacting to Patanmi’s resolve to resist the tariff hike, Ahmed noted: “The five percent excise duty has been in the Finance Act 2020, but has never been implemented.

“A circular stating the planned hike was addressed to the Communications and Digital Economy Minister and other relevant ministries and agencies of government.”

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 Ahmed adds: “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”.

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.

The Finance Minister emphasised 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 till date”.

The reason for the delay in implementing the tariff hike, she explained, is: “To ensure a reasonable transition period before the implementation of the new tax, as well as providing clarity to all stakeholders on implementation modalities.

“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 and 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 statement reads.

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