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The implementation of 5% excise duties on telecommunication services beverages will begin in 2023, the Nigerian government has revealed through the Budget Office of the Federation.
The Budget Office of the Federation, which is under the Ministry of Finance, Budget and National Planning, revealed its plan in its ‘2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper,’ released at the weekend.
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The new tax is designed to help cover up for shortfalls in oil revenue and to also boost government earning from non-oil revenue streams.
Revenue from excise duty is expected to grow exponentially because of the introduction of telecoms service charge, said the budget ministry.
The ministry notes on its paper: “full implementation of excise duty on telecom services, alcoholic, sugar-sweetened beverages, cigarettes and tobacco products.
“Therefore, excise revenue is expected to grow exponentially because of the introduction of the telecom service charge and SSBs”
But the new tax has been described as a burden on the telecoms sector and other industries by the Minister of Communications and Digital Economy, Prof Isa Ali Ibrahim Pantami, and the Manufacturers Association of Nigeria.
“The Ministry of Communications and Digital Economy is not satisfied with any effort to introduce excise duty on telecommunication services. Beyond making our position known, we will go behind the scenes and go against any policy that will destroy the digital economy sector. We will go to any extent to legitimately and legally defend its interest,” said a worried Pantami in a recent event in Lagos.
The federal government is unlikely to shift grounds faced with dwindling revenue and a receding economy.
the finance, budget and national planning ministry notes: “Revenue generation remains the major fiscal challenge of the Federal Government.
“The systemic resource mobilisation problem has been compounded by recent economic recessions. Recognising that domestic revenue mobilization is important for sustainable development, the Federal Government has instituted the Strategic Revenue Growth Initiatives to improve government revenue and entrench fiscal prudence, with emphasis on achieving value for money.
“These measures include improving the tax administration framework, including tax filing and payment, as well as the introduction of new and/or further increases in existing pro-health taxes like excise on sugar-sweetened beverages, tobacco, and alcohol. Mixed reactions have greeted the implementation of these measures.”
From 2023, telecom subscribers will be paying a total of12.5% as tax with the additional five per cent tax.
