FG Suspends Telecoms Tariff Hike, Excise Duty

President Muhammadu Buhari has approved the suspension of the proposed excise duty on telecommunications indefinitely and constituted a committee to look into the matter.

The suspended scheme could have seen an added tax to the tariff for telecom network subscribers but the Minister of Communications and Digital Economy, Isa Ali Pantami, on Monday announced the suspension while inaugurating the presidential committee on excise duty for the digital economy sector.

The minister said the president decided to suspend the taxation after a petition he wrote explaining that the decision will put more hardship on citizens and have a negative impact on the economy.

“Recently, it was announced that government officials have kickstarted the process of introducing excise duty in the telecommunication sector. Based on the constitution of Nigeria, and being the representative of president Buhari in the sector, I rejected that wholeheartedly on the 2nd August 2022. I explained to President Muhammadu Buhari in my letter that it could serve as a petition that we are not in support.”

Also Read: Pantami Rejects Implementation of 5% Excise Duty in Telecoms Sector

Pantami argued that excise duty is usually enforced in luxury products in most countries, such as alcohol, cigarettes or sugar, and it’s done to reduce consumption of certain products, noting that broadband and telecommunication services are essential services supporting businesses.

The committee members include, the Minister of Finance, Budget and National Planning, leadership of the Federal Inland Revenue Service (FIRS), the Nigerian Communications Commission (NCC), and representatives of mobile network operators.

The committee would be allowed to accommodate any other public agency whose involvement would be key in addressing the matter effectively, said Pantami as he tasked them on fairness.

The minister said he had prevented about 15 attempts by operators to increase the prices of services due to rising production cost, inflation among others.

Pantami added “Within these few years, there were more than 15 attempts to increase the prices of telecommunication services and in all, I retained my position by saying no. We apologise to the operators and we will try to address many more challenges to reduce the cost of production so that you can get small profits”.