The Association of Telecommunications Companies of Nigeria (ATCON) has firmly opposed the Federal Government’s plans to reintroduce a five percent excise duty on the telecommunications sector, warning that such a move could impose significant burdens on the industry.
This development comes in the wake of President Bola Tinubu’s July 2023 executive orders, which included a suspension of the excise tax to mitigate the negative effects of tax hikes on businesses and households. However, leaders of the Presidential Tax Reform Committee recently indicated that the proposed Nigeria Tax Bill 2024, currently before the National Assembly, includes provisions for an excise duty on telecommunications, as well as on services like gaming, betting, and lotteries.
The proposed excise duty would be calculated based on the charges set by service providers, regardless of whether those charges are monetary or otherwise.
ATCON President Tony Emoekpere expressed strong concern over this potential policy reversal, highlighting that it could lead to increased costs for consumers and hinder growth in a sector crucial to Nigeria’s digital economy. He remarked, “We had received assurances from the former minister that this issue was settled. It’s alarming to see it re-emerge now, especially as the industry has been pushing for a tariff increase to cope with rising operational costs.”
Emoekpere revealed that ATCON plans to engage with the Ministry of Communications to address the sudden revival of the excise duty proposal. He stated, “The previous minister had successfully shelved this idea, so it’s surprising to see it come up again. We will reach out to the ministry to understand why this proposal is resurfacing and push to prevent its implementation.”
The association’s stance underscores its commitment to advocating for the telecommunications industry’s growth and sustainability amidst ongoing economic challenges.