Telecommunications companies yesterday kicked against the implementation of the 2022 Fiscal Policy Measures and Tariff Amendments which provided that they pay five per cent as excise duty for services provided.
They rejected the tax, describing it as insensitive, unfair and capable of crippling the industry in the way and manner the oil industry has been crippled by different challenges.
According to them, the industry is already saddled with over 39 different taxes, and the present one being proposed for implementation would only send the telecoms sector into coma.
The industry stakeholders represented by the Association of Telecommunications Companies in Nigeria, (ATCON), Association of Licensed Telecommunications Operators in Nigeria (ALTON) and Nigeria Association of Telecommunications Subscribers (NATCOS) asked the government to suspend the implementation of the tax policy indefinitely.
But the Federal Ministry of Finance, Budget and National Planning and the Nigeria Customs Service (NCS) said they are going ahead with the policy implementation as only President Muhammadu Buhari has the power to suspend the implementation based on the schedule of the Act.
The government and telecom industry representatives spoke at the Stakeholders Consultative Forum organised by the Nigerian Communications Commission (NCC), at the Digital Economy Complex, Mbora, Abuja.
Speaking on behalf of ALTON, its Chairman, Gbenga Adebayo said the Mobile Network Operators (MNOs) have taken holistic look at the five per cent excise duty, but had no choice but to pass the burden of payment to the subscribers.
He argued that the industry had been afflicted by exchange rate problems as well as high costs of diesel to power its infrastructures due to erratic power supply in the country.
Adebayo further stated that besides Value Added Tax of 7.5 per cent in the industry, there are 38 other taxes and levies being collected by states, local government and other agencies of government.
“Let me affirm our commitment to partner with the government on this issue and reiterate our resolve to ensure positive collaboration, however, it is important to let you know that telecom operators in Nigeria will not subsidise this new tax, but pass it to the subscribers,” Adebayo stated.
Shedding more light on the implementation of the tax, Adebayo said: “The five per cent Excise Duty will be paid by the subscribers. It will be collected by the operators on all voice and data services including over the top (OTT) operators and remitted to the Nigerians Customs.
The Executive Secretary of ATCON, Mr Ajibola Olude described the tax as unfair, harsh, unjust, opaque and indefensible. He said the tax failed to comply with the known principles of taxation.
He said about 1000 internet service providers (ISPs) have been given licences for operations in the country, but only 10 of them are active. Olude said the telecoms industry is already bleeding to death like the oil industry, warning that the proposed tax if forced down the throats of operators would only cause closures of businesses and loss of jobs.
He pleaded that government should suspend the implementation of the tax forthwith, while alternative measures should be looked into to raise revenue for the administration.
Also speaking, the President, National Association of Telecom Subscribers (NATCOMS), Mr Adeolu Ogunbanjo said subscribers are facing untold hardships currently given the economic outlook of the country and pleaded with the government to suspend the tax implementation.
But the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed said only President Buhari could suspend the implementation, stressing that the Act had already been passed by the National Assembly.
Represented by Assistant Director in Charge of Tax Policy in the Ministry, Musa Umar, the minister said the stakeholders’ engagement was not meant to discuss stoppage of implementation, but modalities and the categories of service providers who are to pay.
Umar who was assisted by Mr Frank Osanipe, a senior tax officer in the Ministry to deliver the Minister’s presentation, said the implementation ought to have started in 2020, stressing that a further delay would mean loss of revenues to the government.
He argued that as long as citizens and organisations do not see reasons to comply with payments of taxes, so long would the government find it difficult to meet its obligations to the people.
Osanipe said the five per cent tax covers telecoms operators, fix telephone, ISPs and all others licensed by the NCC.
He said government would further find ways to collect the five per cent duty even from services rendered by international organisations as long as Nigerians are the consumers of the Services.
The Comptroller-General of Customs, Hameed Ali, represented by Assistant Comptroller-General, Lamin Wushishi said all operators are required by law to register with Customs to enable them assess duties chargeable and conclude mode and time of payment.
He said the law is not strange as been misconstrued, only that it was suspended since the time of NITEL.
“Let me be frank with you, the law has been there. And we expect your cooperation and compliance. Customs already have the data of all operators in the country. It is necessary you come, pick the forms and provide the necessary information. If you don’t come, we will be forced to ensure that you pay with penalty,” Wushishi said.