Call, SMS, and data to cost more as FG announces 5% increase in tax

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The Federal Government is set to place a five per cent tax inclusive excise duty on telecommunications services in Nigeria.

This means that telecommunication subscribers would pay 12.5 per cent tax on all telecommunications services including calls, SMS and data services.

The Minister of Finance Budget and National Planning, Zainab Ahmed, said this in Abuja on Thursday, July 28.

The News Agency of Nigeria (NAN) reports that the five per cent will be added to the already existing 7.5 per cent Value Added Tax (VAT) on telecommunications services.

Ms Ahmed, who was represented by the Assistant Chief Officer of the Ministry, Frank Oshanipin, said the five per cent excise duty has been in the Finance Act 2020 but was not implemented because of government’s engagement with stakeholders.

“Payments are to be made on monthly basis, on or before 21st of every month. 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.

It is public knowledge that our revenue cannot run our financial obligations, so we are to shift our attention to non oil revenue. The responsibility of generating revenue to run government lies with us all,” she said.

Gbenga Adebayo, chairman, Association of Licensed Telecom Owners of Nigeria (ALTON), said the burden would be on telecommunications consumers.

According to him, “It means that subscribers will now pay 12.5 per cent tax on telecom services, we will not be able to subsidise the five per cent excise duty on telecom services. This is as a result of the 39 multiple taxes we already paying coupled with the epileptic power situation as we spend so much on diesel.”