5% telecoms tax: Budget Office differs with Pantami - ITREALMS

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The Director-General of the Budget Office, Mr. Ben Akabueze, has sharply differed with the Minister of Communications and Digital Economy, Isa Pantanmi, over the suspension of 5% excise duty on telecommunications services, reports ITREALMS.

Speaking on Arise Television on Global Business segment on Tuesday, September 6, 2022, and monitored in Lagos by ITREALMS, Mr. Akabueze, attempted to justify telecoms tax in the country, saying that Nigeria currently is under-taxing when compared across the continent of Africa.

He also insisted that members of the private sector were dully part of the Tax Policy Review committee that considered the matter previously and made some recommendations, just as the Finance Ministry has not been advised on the suspension of the tax.

Akabueze pointed out that about four years ago, some 21 African countries had excise taxes on telecoms services, maintaining that Nigeria has the lowest tax to the Gross Domestic Product (GDP) ratio on the continent.

On the clash between the Finance Minister of Finance and the Minister of Communications and Digital Economy on the proposed 5% excise duty on telecommunications services, Akabueze expressed certainty it would be resolved in no distance time.

‘’Well, I am sure that this is a matter that will be resolved in due cause, but let me say something. I am a member of the tax policy review committee which includes members of the private sector, in fact majority of the members are from the private sector and we deliberated on this matter before we arrived at including this in the finance bill for 2020.

Akabueze pointed out that in some 21 countries implementing telecoms tax in Africa since four years ago, their VAT rate was on the average double rate the VAT rate for Nigeria. There are extensive studies on this subject, about the taxation on telecommunication companies in Africa and other developing countries.

“I assure you that the Average Effective Tax Rate (AETR) on telecommunications in Nigeria is below the African average,” he declared.

‘’On this continent, as of today we have the lowest tax to GDP ratio and so at a time we face existential revenue challenges I think we all need to be circumspect on what views we take on this matter. This wasn’t something that the ministry of finance woke up and introduced. The finance bill went through the federal executive council, it went to the national assembly as an executive bill from Mr President. There were public hearings and at the end of the day, they passed it into law, it was signed into law.

‘’We were engaging the customs and NCC about implementation and then I remember the Chief Executive of NCC saying that in accordance with their procedures, they will like to have an engagement with their industry practitioners on this to discuss the modalities for the implementation and that was the last I heard before all of these controversies broke, but I’m sure that it’s something that government will resolve in due cause," he said.

*Chuks Egbune/Editor

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