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Buhari approves exemption of 5 percent excise duty for digital economy sector

Buhari approves exemption of 5 percent excise duty for digital economy sector

President Muhammadu Buhari has approved exemption of digital economy sector from 5 percent excise duty.
The Minister of Communications and Digital Economy, Prof Isa Pantami, disclosed this on Tuesday at the Digital Economy Complex, Mbora, Abuja while briefing newsmen on the outcome of the meeting of the Presidential Review Committee on Excise Duty.

Also, the Executive Vice Chairman of the Nigerian Communications Commission, NCC, Prof Umar Danbatta said data prices in the telecoms sector are expected to reduce due to availability of data and competitions.

Pantami listed members of the Committee as himself, the Minister of Finance and Economic planning, the Chairman of the Federal Inland Revenue Service, (FIRS), the Executive Vice Chairman of the Nigerian Communications Commission, NCC, the representatives of Nigeria Customs Service, Mobile Network Operators, amongst others.

He expressed the appreciation of all stakeholders in the digital economy and telecoms sector to the President, saying the decision to exempt the sector was in recognition of its contribution to Gross Domestic Product (GDP) of the country in the past three years.

The Minister said the exemption was imperative considering the fact that the telecoms sector alone had become over burdened with 41 categories of charges, taxes and levies.

Pantami recalled that on September 5, 2022, the federal government suspended the imposition of a 5 per cent excise duty on the telecoms sector, asserting that President Buhari has on 6th of March 2023 approved the exemption of the sector from payment of excise duty as far as the implementation of the Financial Act law is concerned.

He maintained that the exemption was in exercise of the powers repose on the President by the Constitution, pointing out that the argument relied upon by the proponents of the tax was in respect of subsidiary legislation and not a principal legislation from their regulatory obligations.

Pantami who expressed confidence that the incoming administration of President-elect, Ahmed Bola Tinubu would consolidate and continue with the policy and programmes of the present government, said, the future of the country is about Nigeria’s growth and development, not about an individual.

The Minister said the summary of the exemption was a challenge to other sectors to generate revenues to the coffers of the government just like his Ministry has done in the past three years inspite of the huge challenges in the telecoms industry.

“We increased revenue generation by 594 per cent from N51 billion quarterly to N481 billion quarterly.

This is the only sector where the prices of services have been reduced drastically despite the fact that Mobile Network Operators (MNOs) pay huge sums of money to maintain 32,800 generators to power their infrastructures.

“In 2019, the price of data per Giga-Bite averaged 1,200 naira, but today it is about 350 naira. So there is no justification for the government to impose more burden on its poor citizens because if it imposed the tax, the MNOs would only pass the burden to the citizens,” Pantami said.

Pantami added that President Buhari should be commended also for recognising that the Small and Medium Enterprises (SMEs) in Nigeria depend on the telecoms sector for survival, stressing that imposition of additional taxes on the sector would impact negatively on businesses.

The Executive Vice Chairman of the Nigerian Communications Commission, NCC, Prof Umar Danbatta, in his remarks reiterated the commission’s commitment to improving the telecoms industry.

He said the reduction of data had been the main target of the commission, stressing that with availability of data and competition in the industry, the prices of data would continue to reduce.

He said the average 1 gigabit of data has dropped to between N350 from N335 from 1,200 naira in 2019.

Danbatta said the NCC would continue to maintain the standard and integrity of the industry based on International Telecommunications Union (ITU) standards, and urged Nigerians to report to the Commission, operators charging beyond floor prices approved for services.

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