In view of the surprised discovery that upon an express presidential exemption secured by the Association of Telecoms Companies of Nigeria (ALTON) from paying a five per cent excise duty on telecommunication services as contained by the new Finance Act 2023 into law on May 28, 2023, Chairman of the Group, Engr. Gbenga Adebayo has once again, stressed that the body stands on the exemption.
He made it clear that “Our sector is exempt from it. We have approval from the former minister that the sector is exempted.
“It is in the act, but we got a presidential exemption, so we are unlikely to suffer from the tax. If we do, we are going to pass it on to the subscriber, no doubt. Because we are just going to act as collection agents.”
The cost of calls, data, and SMS may rise after the former president of Nigeria, Muhammadu Buhari, signed a five per cent excise duty on telecommunication services into law despite protests against the move.
Recall that as part of his last acts as president, Buhari signed the Finance Act 2023 into law on May 28, 2023.
Whereas it is very clear that the exemption has presidential backing, according to section 21 of the Principal Act amended by substituting for subsection (2), a new subsection (2), all services, including telecommunication services would be charged excise duty.
But there are fresh fears that government may have backed out as a part of the document leaked on LinkedIn by the Fiscal Policy Partner and Africa Tax Leader, PricewaterhouseCoopers, Taiwo Oyedele, read, “All services, including telecommunication services, provided in Nigeria shall be charged with duties of excise at the rates specified under the duty column in the Schedule as the President may by order prescribe pursuant to section 13 of this Act.”
Since July 2022, the Federal Government has tried, many times, to implement a five per cent excise duty on telecom services to boost revenue generation.
However, in a swift drive, the immediate former Minister of Communications and Digital Economy, Isa Pantami, announced in a statement that the government has exempted the telecoms sector from excise duty tax.
He made it clear that government considered a variety of factors including the fact that Technology and Communication sector, especially the telecom industry, is overburdened by excessive and multiple taxations, and any additional tax on the sector would affect the sector if the government fails to take any precautions.
Buhari government announced in March 2023 that it was concerned about the sufferings of Nigerians and had exempted telecoms from excise duty.
Just as Business Hilights has just learnt that the provisions of the new Finance Act 2023 has been gazette without any exemption clause, it is not yet clear on modalities for its implementation.
Analysts say in view of the cash crunch state of the federal government, it is not yet clear if the current administration of President Bola Tinubu would still stand on the already granted tax exemption to ALTON members of back out after all.