Telecoms exempted from 5 per cent excise duty, ministry insists

• Sector’s contribution to GDP hits N594 billion
The Ministry of Communications and Digital Economy said the digital economy has been excluded from the planned five per cent excise duty approved by the Federal Government.

Reacting to the Approval for implementation of the 2023 Fiscal Policy Measures and Tariff Amendments recently released by the Ministry of Finance, Budget and National Planning, the ministry insisted that President Muhammadu Buhari had exempted it from the proposed tax.

A statement signed by the Spokesperson to the Minister of Communications and Digital Economy, Mrs. Uwa Suleiman, made available to journalists, yesterday, clarified the matter.

“President Muhammadu Buhari had on March 21, 2023, approved the exemption of the Telecommunications Sector from the proposed excise duty in line with the recommendations of the Presidential Review Committee on Excise Duty in the Digital Economy Sector,” she stated.

Suleiman explained that a six-member committee, which was constituted at the behest of the minister and approved by the President, was formally inaugurated on September 5, 2022 to critically and objectively assess the potential effects on the economy of an additional five per cent excise duty tax charge on the digital economy sector.

According to her, after five months of intensive and objective deliberations, the committee submitted its report to the President precisely on February 13, 2023.

The minister’s spokesperson said the report recommended the exclusion of the proposed, and then suspended five per cent excise duty tax on the digital economy sector, citing incontrovertible facts.

These facts, according to Suleiman, includes the unprecedented contribution of the sector to the nation’s Gross Domestic Product (GDP), the sustained quantum leap in government revenue, which currently stands at a staggering N594 billion quarterly, its position as the baseline driver of innumerable businesses at the micro, medium and small scale levels among others.

The committee, she said, further analysed the existing 41 taxes, levies and charges already imposed on the sector “and concluded that instead of burdening the sector with more taxes, concessions should be considered, in order to sustain its unprecedented contributions to the growth of the Nigerian economy. Based on the strength of its findings, the Committee prayed that the President exempts the Digital Economy sector from the proposed additional excise duty.”

According to her, Pantami further emphasised that besides overburdening the sector, imposing additional taxes to the sector will bring hardship to the citizens of the country and appealed to the President’s compassion in his decision.

As such, she stated that President Buhari on March 13, 2023, approved the following prayer:

“The Government exempts the Digital Economy sector from excise duty charges in order to sustain and enhance use of Digital Economy services and to further benefit from their positive impacts on the economy.”

Based on President Buhari’s approval, Suleiman said: “the office of the Minister of Communications and Digital Economy, hereby assures the sector and the general public that the President’s approval, supercedes all other declarations regarding the issue and we stand by it. Any contrary proclamation should be disregarded by the general public.”

She recalled that Pantami, has vehemently opposed the proposed five per cent Excise Duty for telecommunications services, on the grounds that it is unjustifiable, as it will be burdensome for the citizens of the country.