The Federal Government has announced the removal of excise duty for telecom sub-sector after six months of intense deliberations.
Minister of Communications and Digital Economy, Prof. Isa Ali Ibrahim Pantami, disclosed this Tuesday in Abuja at a briefing to provide updates on the status of the 5 per cent excise duty, whose applicability to the telecom sector was objected by the Minister in August 2022.
This is in line with the recommendations of Presidential Review Committee on Excise Duty in the Digital Economy Sector to review the applicability of the Duty to the telecom sector considered already overburdened with over 41 taxes, sundry levies and charges.
Pantami who is the chairman of the presidential review committee on excise duty in the digital economy sector stated that the committee had carried out its national assignment and accordingly submitted its report to the president, justifying why the sector should be exempted.
He said: “First, operators in the telecoms sub-sector currently pay no fewer than 41 different categories of taxes, levies and charges; secondly, telecoms has continued to be a major contributor to Nigerian economy in terms of Gross Domestic Product Contribution (GDP).
“The third ground is that the sector, despite increase in the cost of all factors of production naturally leading to increase in costs of products, the cost of service has been stable and in many cases continued to go down over the past years and therefore, adding more burden will destroy the sector.”
The Minister said the President, having looked into the arguments exempted the telecom sector from the excise duty as stated in Finance Act of 2021.”
Nigeria reportedly has one of the biggest telecoms markets in Africa which has witnessed strong growth in recent years and is expected to have continued growth over the forecast period to 2025. The growth in the sector has been attributed to the increasing urban population with rising adoption of mobile phones that support 3G, 4G and 5G services across the country.
The sector over the years has contributed immensely to Nigeria’s economy and the lives of Nigerians. The advancement of mobile phone usage from basic phone telephony to new enhanced services and the introduction of new technology within diverse sectors of the country have seen the sector grow massively.
