The Nigerian Government has on Monday announced the suspension of the 5% tax on telecom services in the country earlier revealed by the Ministry of Finance.
Driving the news
The Minister of Communications and Digital Economy, Isa Pantami, who pleaded the cause of the already overtaxed telecom stakeholders and burdened Nigerians to the Nigerian President, announced the suspension at an inaugural meeting in Abuja.
- The Minister also disclosed that the President allowed a review committee to inspect tax in the country and report to the president.
- In the committee, Mr. Isa Pantami serves as the Chairman, while the Minister of Finance and National Planning, Chairman Federal Inland Revenue Services (FIRS), Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC) and Representatives of all the telecom companies in Nigeria are members.
Why it matters
The suspension of the proposed 5% tax on the telecom sector is a big economic relief for telecom stakeholders and Nigerians.
What you should know
The Information and Communication Sector (ICT) in Nigeria is overburdened as it pays taxes numbering 41.
Regardless of the tax burden on the sector, a recent report by the National Bureau of Statistics on Nigeria’s Gross Domestic Product (GDP), the Information and Communication Technology (ICT) sector contributed 18.44% to the country’s GDP in Q2 2022. ICT sector grew by 6.55% in Q1 2022.
According to the Minister of Finance, Dr Zainab Shamsuna Ahmed, in the first four months of 2022, the country earned N632.56 billion from non-oil tax.
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.