The Federal Government of Nigeria, through the Budget Office of the Federation, has announced that the proposed increase in excise duties on telecommunication services and beverages would take effect in 2023.

The federal government is proceeding with the 5% excise duty on telecommunication services and a N10 per litre sugar tax on sugar-sweetened drinks despite criticism from the Minister of Communications and Digital Economy, Isa Pantami, and the Manufacturers Association of Nigeria.

In case you missed it 
The Minister of Finance Budget and National Planning, Zainab Ahmed, late last month, announced a 5% increase in excise duty on telecom operators in Nigeria. This is exclusive of the 2% excise duty to the Nigeria Communication Commission (NCC), 7.5% Value Added Tax (VAT) and other 39 taxes.

The federal government also announced a projected revenue of at least N150 billion from the 5% duty. 

In June, the federal government had announced excise duty on sweetened drinks, tobacco, alcohol, narcotics, gambling to discourage usage and consumption.

What they are saying 
The Budget Office of the Federation, which is under the Ministry of Finance, Budget and National Planning have disclosed that the excise duty which is under the purview of Nigeria Custom Service (NCS) would incorporate a framework that ensures remittance of duties, taxes and fees over electronic networks. 

On the other hand, Chairman, Association of Licensed Telecom Owners of Nigeria, Gbenga Adebayo, continues to advocate for the dismissal of such duties as telecom operators would pass the 5% to consumers. 

What you should know 

  • The Nigerian government claims that while the 5% on excise duty is to help boost Nigeria’s earnings from non-oil revenue streams, the N10 per litre sugar tax on sugar-sweetened drinks is to discourage usage. 
  • It is worthy of note that the ICT sector tops the list of leading industries in the country with a valuation of N11.21 trillion as of June 2022 with a growth of 40.1% representing N3.59 trillion.
  • Also, telecommunication giants such as Airtel Africa and MTN Nigeria occupy first and third position as most capitalized companies in Nigeria. 
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