Telecoms operators kick as FG, Customs begin implementation of five percent tax

Posted by News Express | 29 July 2022 | 552 times

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Telecommunications companies have kicked against the implementation of the 2022 Fiscal Policy Measures and Tariff Amendments, which provide they pay 5 percent as excise duty for services provided.

They rejected the tax, describing it as insensitive, unfair, and capable of crippling the industry in the way and manner the oil industry has been crippled by different challenges.

According to them, the industry is already saddled with over 39 different taxes and the present one being proposed for implementation would only send the telecoms sector into a coma.

The industry stakeholders were represented by the Association of Telecommunications Companies in Nigeria (ATCON), Association of Licensed Telecommunications Operators in Nigeria (ALTON) and Nigeria Association of Telecommunications Subscribers (NATCOS) asked the government to suspend the implementation of the tax policy indefinitely.

But the Federal Ministry of Finance, Budget and National Planning and the Nigeria Customs Service (NCS), said they are going ahead with the policy implementation as only President Muhammadu Buhari has the power to suspend the implementation based on the schedule of the Act.

The government and telecoms industry representatives spoke at the Stakeholders Consultative Forum organised by the Nigerian Communications Commission (NCC), at the Digital Economy Complex, Mbora, Abuja.

Speaking on behalf of ALTON, its President Gbenga Adebayo said the Mobile Network Operators (MNOs) have taken holistic look at the 5 percent excise duty, but had no choice than to pass the burden of payment to the subscribers.

He argued that the industry had been afflicted by exchange rates problems as well as high costs of diesel to power its infrastructures due to erratic power supply in the country.

Adebayo further stated that besides Value Added Tax of 7.5 percent in the industry, there are 38 other taxes and levies being collected by states, local government and other agencies of government.

“Let me affirm our commitment to partner with the government on this issue and reiterate our resolve to ensure positive collaboration, however, it is important to let you know that telecoms operators in Nigeria will not subsidise this new tax, but pass it to the subscribers,” Adebayo stated.

The Executive Secretary of ATCON, Ajibola Olude, described the tax as unfair, harsh, unjust, opaque and indefensible.

He said the tax failed to comply with the known principles of taxation.

He said about 1000 ISP has been given licenses for operations in the country but only 10 of them are active.

Olude said the telecoms industry is already bleeding to death like the oil industry, warning that the proposed tax if forced down the throats of operators would only cause closures of businesses and loss of jobs.

He pleaded that government should suspend the implementation of the tax regime forthwith, while alternative measures should be looked into to raise revenue for the administration.

President of Association of Subscribers, Adeolu Ogunbanjo, said subscribers are facing untold hardships currently given the economic outlook of the country and pleaded with the government to suspend the tax implementation.

But the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed said only President Muhammadu Buhari could suspend the implementation, stressing that the Act had already been passed by the National Assembly.

Ahmed, who was represented by Assistant Director in Charge of Tax Policy in the Ministry, Mal Musa Umar, said the stakeholders’ engagement was not meant to discuss stoppage of implementation, but modalities and the categories of service providers who are to pay.

Umar, who was assisted by Frank Osanipe, a senior tax officer in the Ministry to deliver the Minister’s presentation, said the implementation ought to have started in 2020, stressing that a further delay would mean loss of revenues to the government.

He argued that as long as citizens and organisations do not see reasons to comply with payments of taxes, so long would the government find it difficult to meet its obligations to the people.

Osanipe said the five percent tax covers telecoms operators, fix telephone, Internet service providers and all others licensed by the Nigerian Communications Commission.

He said government would further find ways to collect the five percent duty even from services rendered by international organisations as long as Nigerians are the consumers of the Services.

The Comptroller-General of Customs, Hameed Ali, represented by Assistant Comptroller-General, Lamin Wushishi said all operators are required by law to register with Customs to enable them assess duties chargeable and conclude mode and time of payment.

He said the law is not strange as been misconstrued, only that it was suspended since the time of NITEL.

“Let me be frank with you, the law has been there. And we expect your cooperation and compliance. Customs already have the data of all operators in the country.

‘’It is necessary you come, pick the forms and provide the necessary information. If you don’t come, we will be forced to ensure that you pay with penalty,” Wushishi said.  (Nation)

Source: News Express

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