The Association of Telecommunication Companies of Nigeria (ATCON) have rejected plans by the federal government to reintroduce a 5 per cent excise duty on the telecommunications industry.
An executive bill, titled ‘Nigeria Tax Bill 2024,’ before the National Assembly, seeks to reintroduce a 5 per cent excise duty on telecommunications services, gaming, betting, and lottery activities.
The proposed bill comes more than one year after President Bola Tinubu, signed an executive order suspending the 5 per cent excise tax on telecommunication services
President of ATCON, Tony Emoekpere, who expressed the association’s dissatisfaction with the bill, said it would be unfair for the government to impose an excise duty when telecommunication companies are striving to sustain operations.
He said the industry was already weighed down by lack of revenue, as tariffs charged have remained the same for 10.
“To add this to the already existing situation is like a blow that might totally sink the sector,” Emoekpere stated.
Emoekpere said the association thought since the sector was earlier exempted not just by the former minister but also by the current president, it was a foregone issue.
The ATCON president said plans were underway to meet the minister of communications, innovation and digital economy, Bosun Tijani, to prevent the implementation of the excise duty.
“We will be exploring all avenues to find out why it’s coming up again despite all the efforts of the former minister and why it is still arising,” Emoekpere said.
ATCON called on the federal government to look into improving the sector as it is a major source of revenue and boost to the economy.
“What the government should be considering, is what are the primary causes of high costs of operations to the telecom sector and ways to ameliorate them,” he said.
Continuing, Emoekpere said one of the biggest challenges is the fact that a bulk of the communication sites are dependent on diesel, which cost had escalated with the foreign exchange volatility.
“So, if they (the government) say we are not increasing the tariff, what are the measures they are giving in terms of tax breaks or tax incentives, are there ways whereby we can encourage more local production of some of the inputs into the sector?
“These are things the government should be looking at not adding additional excise duty tax on a sector that’s already really pushing forward.
“We don’t want to get to a situation whereby people are not able to communicate at all,” he added.
Emoekpere said what telcos need at the moment is revenue to meet their operational needs, overcome losses and improve their services.
