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According to Daily Trust, if a federal government proposal to raise the consumption tax on telecom services is approved, call and data rates could rise by as much as 100%.
According to the Daily Trust, the federal government recently announced its intention to impose a 5 percent excise duty tax on telecom services, bringing the overall consumption tax on these services to 12.5 percent.
The new tax regime, according to industry sources, will not only affect subscribers but also add tax burden on the telcos which would translate into rise in tariffs.
If the 5 per cent increment is eventually implemented, industry experts say, Nigerians will now be paying as much as N40 per minute call, up from about N20. And data tariffs could also go up to about N2,500 per gigabyte.
The finance minister, who unveiled the plan at a stakeholders’ forum on the implementation of excise duty on telecommunications services in Nigeria organized by the Nigerian Communications Commission (NCC), said the 5 percent excise duty was in the Finance Act, 2020.
She said the accrued taxes would be remitted on monthly basis, on or before 21st of every month. The move, according to the minister, was part of effort by the government to boost non-oil revenue in the face of dwindling income, especially from the oil sector.
The proposal has, however, set Minister of Finance, Budget and National Planning, Zainab Ahmed, and the Minister of Communication and Digital Economy, Prof Isa Ali Pantami, on collision course.
While the Ministry of Finance cites a presidential approval to apply the new excise on telecommunication services, as provided by the Finance Act, the Ministry of Communication and Digital Economy is kicking on the ground that the new tax would be harmful to the sector and to subscribers.