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Subscribers may pay more as government moves to levy airtime

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Chairman, MTN Nigeria, Dr. Ernest Ndukwe, (left); Chief Financial Officer, MTN Group, Tsholo Molefe; Chief Executive Officer, MTN Group, Ralph Mupita; Minister of Communication and Digital Economy Dr. Isa Ali Pantami; Executive Vice Chairman, Nigerian Communications Commission, Prof. Umar Garba Danbatta and Chief Executive Officer, MTN Nigeria, Karl Toriola, during a courtesy visit by the MTN Group at the Minister’s office in Abuja…yesterday.<br />

ALTON kicks describes tax anti-digital economy

Telecommunications operators have kicked against plans to impose excise duty on airtime, arguing that it will lead to double taxation.

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Operating as Association of Licensed Telecoms Operators of Nigeria (ALTON), the service providers insisted that the tax was the anti-digital economy.

ALTON Chairman, Gbenga Adebayo, told The Guardian, yesterday, that operators were already over-taxed with individual player paying as much as 35 different taxes.

Adebayo was reacting to reports that the Federal Government was considering duty on vouchers to boost revenue for the broke nation.

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A report quoted the Director-General of the Budget Office of the Federation, Ben Akabueze, as saying: “Last year, we found that 51 countries in Africa have excise on airtime charges, so we are looking at that, as well as an area to tax.”

He spoke at a World Bank event in Abuja where the need for government to raise additional revenue was discussed.

But Adebayo said since the purpose for the planned introduction was not clear to industry players, telecoms operators would rather wait to see how the government plans to introduce an excise tax on airtime.

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He said the government would want the operators to collect the tax for them, which subsequently means that additional cost would be passed to about 190 million subscribers in the country.

The ALTON boss continued: “It is not clear to telecoms operators why the Federal Government wants to introduce an excise tax on telecoms airtime recharge. Excise duty is introduced in manufacturing goods and it is introduced when the government wants to reduce the intake of such manufactured product, Except the Federal Government wants to discourage importation of recharge cards into Nigeria in order to encourage telecoms operators to use alternative means of vending airtime, like the virtual top-up that does not need a physical recharge card.

“For example, it will be understandable if the Federal Government decides to introduce an excise tax on consumption of tobacco products because it wants to reduce the consumption of tobacco in Nigeria because of the health implications, but it will be out of place for government to introduce an excise tax on telecoms airtime.”

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He added that the industry remained the only sector that had not increased charges on services and airtime since the advent of the Global System for Mobile Communication (GSM), warning that the move would negatively affect services across the networks.

“Government should be careful not to introduce additional burden on telecoms operators. They should not take away digital economy access of the people by heavy taxation,” Adebayo cautioned.

In the meantime, the leadership of MTN Group, yesterday, undertook a three-day working visit to Nigeria.

Including the Group’s CEO, Ralph Mupita and CFO, Mrs. Tsholo Molefe, the delegation said it would join the MTN Nigeria Chairman, Dr. Ernest Ndukwe and CEO, Karl Toriola, in meetings with select partners and key stakeholders in the country.

This is Mupita’s first official tour of the most populous nation since assuming office in 2020.

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