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Home » NASS Proposes 5% Excise Duty On Telecoms, Betting As ALTON, ATCON Kick
Telecoms

NASS Proposes 5% Excise Duty On Telecoms, Betting As ALTON, ATCON Kick

The Association of Licensed Telecom Operators of Nigeria (ALTON) and other industry leaders have expressed their opposition, highlighting that excise duties are typically imposed on goods, not services, and emphasizing the need for the government to reconsider the timing of such a tax.
mmBy Rommy Imah21 October 2024No Comments5 Mins Read102 Views
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News Highlights:

  • Nigeria’s National Assembly has proposed a five percent excise duty on telecommunications services, gaming, betting, and lottery activities through the “Nigeria Tax Bill 2024.”
  • Stakeholders in the telecoms sector have criticized the proposal as insensitive to the current economic climate, arguing it would exacerbate the financial burden on consumers.

Nigeria’s national assembly has proposed a five percent excise duty on telecommunications services, gaming, betting, and lottery activities.

Recall that on July 6, 2023, President Bola Tinubu signed four executive orders, one of which suspended the 5 percent excise tax on telecommunications services to mitigate the adverse effects of tax adjustments on businesses and households.

However, according to an executive bill, titled ‘Nigeria Tax Bill 2024,’ the national assembly is seeking reintroduction of the excise duty.

The bill is proposing that the amount of an excisable transaction is the amount chargeable for the service by the service provider, “both in money or money’s worth”.

“Services, including telecommunications, gaming, gambling, betting, and lotteries however described, provided in Nigeria shall be charged with duties of excise at the rates specified under the Tenth Schedule to this Act in a manner as may be prescribed by the Service,” the document reads.

The national assembly suggested that the exchange rate must not exceed the prevailing rate at the official market, authorised by the Central Bank of Nigeria (CBN) where an exchange of currency transaction involving the naira is conducted within or outside Nigeria.

The legislature said where the exchange rate of the transaction exceeds the prevailing exchange rate at the official market authorised by the CBN, the excess should be payable as excise duty by the seller on a self-assessment basis as provided in the Nigeria Tax Administration Act.

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Meanwhile, stakeholders in the telecommunications industry have described the move as insensitive to the current economic climate and the financial struggles faced by consumers.

Digital TimesNG understands that this proposal is part of a broader tax reform initiative outlined in a new bill titled “A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions, and Instruments, and Related Matters,” dated October 4, 2024.

Initially introduced in 2022, the excise duty faced significant backlash from industry stakeholders and consumers, leading to its suspension in July 2023 by President Bola Tinubu.

The Association of Licensed Telecom Operators of Nigeria (ALTON) has expressed serious concerns, arguing that imposing such a levy would exacerbate the financial strain on subscribers already grappling with economic challenges.

The ALTON Chairman, Engr. Gbenga Adebayo, told The PUNCH on Sunday that the proposed tax would exacerbate the current challenges of many Nigerians who are already battling with the increase in the price of several other products and services.

“We stand by our objection to the proposed tax. We had written extensively about this before regarding the implications for consumers. Even as operators meant to collect these taxes, we believe it is insensitive to the subscriber today.”

Adebayo underscored the pressing challenges facing the telecommunications industry and the broader economy, emphasizing that the purchasing power of Nigerians has drastically decreased.

“Given the challenges that the industry and the economy are facing, it would be insensitive for the government to introduce this type of levy on consumers at this time. We kick against it and think the government should rethink this proposal because the time is certainly not right for it,” he said.

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Adebayo stated that excise duties are typically imposed on goods, not services, insisting that “What we know before now is that excise duties apply to goods, not services. With the government introducing this now, we think it is not proper. We will continue to advance our position on this matter.”

“While we advocate that the current tax regime is not reflective of the economic conditions, the government has argued that people’s purchasing power has reduced and that we shouldn’t increase fees.

“So, how come the government wants to tax the subscribers if they can’t allow us to increase fees to provide improved services reflective of the cost of operations? It’s like saying something else and doing something else.”

President of the Association of Telecommunications Companies of Nigeria, Tony Emoekpere, told The PUNCH in an interview that the association was surprised by the reintroduction of the telecom excise tax, which was previously shelved after objections from the industry.

“We just received information about this reintroduction of the five per cent telecom tax, and we are currently studying the proposal to understand its full implications,” Emoekpere said. “The telecom industry has been clamouring for a tariff increase to sustain operations, and this new excise duty will only exacerbate the challenges we face.”

He expressed concern that the excise duty would have a negative impact on the telecom sector, which is already struggling to sustain its operations.

“We’re here to see how this excise duty will affect the industry, but it seems clear that it will have a negative impact on both telecom companies and consumers,” he said.

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“The implementation of an excise duty is challenging because it is typically a fixed fee, unlike VAT, which is a percentage-based tax. This will be difficult to manage.”

#5% Excise Duty #ALTON #ATCON #Betting #NASS #Telecoms
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Rommy Imah
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Rommy Imah is Founder/Editor of Digital Times Nigeria (www.digitaltimesng.com). He has been in active journalism in over two decades with a bias for technology and business reporting. He is particularly passionate about technology and how it can be used to transform human life, businesses and services.

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