From Adanna Nnamani, Abuja
The Federal Government is projected to generate well over N165 billion in one year from its proposed 5 per cent excise duty on telecommunications services like calls, data, SMS and others, in an effort to swell revenue from non-oil sectors.
This comes amid wild rejection from telecommunications firms, who said they were already peppered by 38 existing taxes, with the latest one being the 39th.
Data from the Nigeria Communications Commission (NCC) showed that Nigerians and other nationals within Nigeria spent N3.25 trillion on airtime, data, and other telecommunication services in 2021.
If the new rule had taken off last year as planned, the government would have netted N162.5 billion from the 5 per cent tax in one year.
Analysts note that spending by Nigerians on telecommunications services in 2022 will remarkably surpass the N3.25 trillion spent in 2021 because of the uptick in political activities in which many consumers spent far higher on calls, data, SMS to guarantee full participation.
More so, telecommunication subscribers in Nigeria spent at least N615.08 billion on calls and data in the first quarter of 2022, according to data from the financial statement of the MTN Nigeria Communications Plc and Airtel Nigeria.
This represents a 23.09 per cent increase from the N499.66 billion they made in the corresponding period of 2021.
The amount 9mobile and Globacom made from these revenue streams are not available as they are not publicly traded companies.
Meanwhile, according to data from the NCC, MTN and Airtel are the two major voice carriers in the nation.
In 2021, 173.56 billion minutes of calls were made in Nigeria, indicating a 15.07 per cent increase from the 150.83 billion minutes of calls that were made in 2020. The number of SMS sent increased by 15.06 per cent from 8.22 billion in 2020 to 9.46 billion in 2021.
The revenue was generated by operators in GSM, fixed wired, Internet service provision, value service added, collocation and infrastructure sharing, and other spaces.
Nonetheless, telecoms have expressed deep concerns over the new move by the cash-strapped federal government to slam 5 per cent tax on telecommunications services, insisting that it is an overkill, as 38 other taxes were already asphyxiating them.
According to Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Mr Gbenga Adebayo, the exercise duty on services was unusual, stating that the new tax burden would be passed to subscribers.
“It is a strange move, it appears a bit unusual. exercise duty is suppose to be apportioned to goods and products, but we are surprise this is on Services.
“We will continue to support government but ALTON, won’t be able to subsidy this on behalf of subscribers in addition to the 7.5 per cent VAT making it 12.5 per cent payable by subscribers to the Federal Government.
“We currently pay a lot of taxes, running into 39 of them, so we can’t add more to the our existing burden. We won’t be able to absolve this on behalf of subscribers.
“The 5 percent Excise Duty will be paid by the subscribers. It will collected by the operators on all voice and data services including OTT and remitted to the Nigerians Customs”, he stated.
Also reacting, President of Association of Telecommunications Companies of Nigeria (ATCON), Ken Nnamani said, “the proposed exercise duty do not comply with principle of taxation, fairness, certainty, convenience and efficiency”.