5% Excise Responsibility: Telecom Corporations Reject Proposed Reintroduction

5% Excise Responsibility: Telecom Corporations Reject Proposed Reintroduction

The Affiliation of Telecommunications Corporations of Nigeria, ATCON, has rejected plans by the Federal Authorities to reintroduce a 5 % excise responsibility on the telecommunications sector, warning that the transfer might considerably burden the trade.

On July 6, 2023, President Bola Tinubu signed 4 govt orders, together with one which suspended the 5 % excise tax on telecommunication companies. This transfer was aimed toward assuaging the unfavourable influence of tax hikes on each companies and households.

However leaders of the Presidential Tax Reform Committee had hinted in Abuja final week that the proposed Nigeria Tax Invoice 2024 now earlier than the Nationwide Meeting for legislative approvals has offered for excise responsibility on telecommunications companies, together with different companies like gaming, betting, and lotteries.

In response to the invoice, the excisable quantity shall be based mostly on the service supplier’s prices, whether or not financial or in any other case.

Rejecting this proposed coverage summersault, ATCON yesterday, cautioned that the brand new tax would probably result in larger prices for customers whereas stifling development in a sector important to Nigeria’s digital financial system.

ATCON President, Tony Emoekpere, additionally expressed concern over the timing of the proposal, which comes amid ongoing financial challenges.

He said: “We had obtained assurances from the previous minister that this concern was settled. It’s alarming to see it re-emerge now, particularly because the trade has been pushing for a tariff enhance to deal with rising operational prices. As a substitute, we are actually confronted with a worth hike that brings no profit to the trade.”

Emoekpere revealed that ATCON intends to have interaction the Ministry of Communications to deal with the sudden reappearance of the excise responsibility proposal.

“The earlier minister had efficiently shelved this concept, so it’s stunning to see it come up once more. We are going to attain out to the ministry to grasp why this proposal is resurfacing and push to forestall its implementation,” he added.

Past rejecting the excise responsibility, Emoekpere referred to as on the federal authorities to prioritize supporting the telecom sector, which performs a essential position within the nation’s financial system. He emphasised that the federal government ought to deal with decreasing the excessive operational prices within the sector, quite than imposing further taxes.

“One in every of our greatest challenges is the heavy reliance on diesel to energy telecom infrastructure. With the latest liberalization of the international alternate market, diesel prices have skyrocketed. Foreign money fluctuations straight influence the price of petroleum merchandise, putting an amazing monetary pressure on the trade,” Emoekpere defined.

To deal with these challenges, Emoekpere urged the federal government to offer tax reduction or incentives and to advertise native manufacturing of key telecom inputs.

“If the federal government is unwilling to permit tariff will increase, they need to at the least provide tax breaks or help for native manufacturing. Extra excise duties will solely exacerbate the challenges dealing with an already strained trade,” he confused.