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No going back on 5% telecom tax, says Fed Govt

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

A statement from the Federal Ministry of Finance Budget and National Planning said the tariff hike will go on in spite of resistance from the Minister of Communication and Digital Economy, Prof. Ali Pantami.

The government said it will begin “the implementation of five per cent excise duty tax on all voice calls, SMS and data services, in addition to the existing 7.5 per cent 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.

At that meeting, Mrs. Ahmed, who was represented by the Assistant Director, Tax Policy, Federal Ministry of Finance, Budget and National Planning, Musa Umar, noted: “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.”

Reacting to Pantami’s resolve to resist the tariff hike, she said “the five per cent excise duty has been in the Finance Act 2020 but has never been implemented.” Mrs Ahmed added  that “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 (Economic Community of West African States) Common External Tariff (CET) 2022-2026 and excise duties on non-alcoholic beverage, cigarettes and tobacco products as well as telecommunication services with effect from 1st April 2022.

The circular signed by Mrs. Ahmed reads: “A grace of 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.

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