Nigeria: Buhari’s declaration overrides new telecom tax policy – Pantami

The Minister of Communications and Digital Economy, Prof. Isa Pantami, has insisted that the proposed 5% excise duty on telecommunications services will not be implemented. He also stated that any policy formulated after the exemption declared by President Muhammadu Buhari in March 2023 is overridden by it.

Reacting to the Fiscal Policy Measure document recently released by the Ministry of Finance, Budget and National Planning, which listed the telecom tax as part of measures to be implemented this year, Pantami, in a statement released on Wednesday (May 3rd, 2023) urged Nigerians and telecom industry stakeholders to disregard the policy document.

The Minister recalled that President 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.

Incidentally, the document from the Finance Ministry also claimed that the fiscal policy measures, which included the implementation of the telecom tax were approved by the President.

The statement

Pantami in the statement signed by his spokesperson, Uwa Suleiman, said:

• “The attention of the Honourable Minister of Communications and Digital Economy, Professor Isa Ali Ibrahim (Pantami) has been drawn to a document circulating online titled; Approval for the implementation of the 2023 fiscal policy measures and tariff amendments allegedly emanating from a government institution.
• “However, the Federal Government of Nigeria through the office of the Honourable Minister of Communications and Digital Economy, wishes to clarify the public misconception and press inquiry contained in the letter.
• “The six-member Committee which was constituted at the behest of the Honourable Minister and approved by the President was formally inaugurated on the 5th of September, 2022 and membership included; the Honourable Minister of Communications and Digital Economy as Chairman, Honourable Minister of Finance, Budget and National Planning, Chairman Federal Inland Revenue Service (FIRS), Executive Chairman Nigerian Communications Commission (NCC) as Secretary and two representatives of the Mobile Network Operators (MN0s). The Committee’s mandate was to critically and objectively assess the potential effects on the economy, of an additional 5% excise duty tax charge on the digital economy sector.”
• “After five months of intensive and objective deliberations, the Committee submitted its report to the President precisely on the 13th of February 2023. The report had recommended the exclusion of the proposed, and then suspended 5% excise duty tax on the Digital Economy Sector, citing incontrovertible facts including; 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 Five Hundred and Ninety four Billion Naira quarterly, its position as the baseline driver of innumerable businesses at the Micro, Medium and Small scale levels among others.
• “The Committee further analyzed the existing forty one (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.”

The Minister further emphasized that besides overburdening the sector, imposing additional taxes on the sector will bring hardship to the citizens of the country and appealed to the President’s compassion in his decision.

What President Buhari approved

Based on the committee’s submission, Pantami said President Buhari specifically approved the following prayer:

• “The government exempts the digital economy sector from excise duty charges in order to sustain and enhance the use of digital economy services and to further benefit from their positive impacts on the economy.”
• “The office of the Honourable Minister of Communications and Digital Economy, hereby assures the sector and the general public that the President’s approval supersedes all other declarations regarding the issue, and we stand by it. Any contrary proclamation should be disregarded by the general public,” Pantami said.

When it was first announced in 2022, Pantami vehemently opposed the proposed 5% excise duty for telecommunications services on the grounds that it was unjustifiable and would be burdensome for the citizens of the country.