Why telecom operators should be exempted from excise duty—NCC

The Nigerian Communications Commission (NCC) has said that the telecom industry should be totally exempted from any excise duty as the services being provided are not luxury services.

The Executive Vice Chairman of the Commission, Prof. Umar Danbatta, stated this at the Telecom Executives and Regulators Forum (TERF) organized by the Association of Telecommunications Companies of Nigeria (ATCON).

According to him, while the recent suspension of the 5% excise duty on telecom services was commendable, what the industry needs is a total exemption from any excise duty.

To this end, the NCC boss said the Commission has been engaging with the Minister of Communications, Innovation and Digital Economy, to highlight the current tax issues in the industry and why telecom should not be mentioned in relation to excise duties.

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He noted that as of last year, the total number of taxes being paid by the telecom operators stood at 41 and as of the second quarter of this year, it has increased to 46.

Addressing the gathering of telecom chief executives on some of the steps being taken by the regulator to address the industry issues, Danbatta said:

“When the government attempted to introduce the 5% excise duty on telecommunication services, I remember we listed 41 levies, taxes, and charges that have been forced on telecommunication companies in the country. And now, the number has gotten to 46.

“The Immediate past President Buhari had approved the exemption of telecom from the excise duty. It, however, came as a total shock to us when the duty came up again in the Finance Act amended by the National Assembly.

“President Tinubu again suspending the excise duty is a good sign and I assure you that we are going to continue to argue convincingly that the duty on telecommunication services should not only be suspended but telecommunication services should be exempted from excise duty because the excise duties are paid on luxury items and telecommunication services cannot be considered as a luxury.

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“Telecommunication services have become very much a part of our individual lives, and they affect more than 220 million Nigerians.

“The planned 5% excise duty was going to be borne by the millions of subscribers. You can imagine what would be the implication if that was implemented.

“Many would not be able to continue using these important services. So, we are delighted with the suspension but we have engaged our minister to draw his attention to the need to really exempt the sector from this duty altogether.”

Speaking earlier, the President of ATCON, Mr. Tony Emoekpere, said the Forum was aimed at providing a unique atmosphere for key industrial regulators to provide keynote addresses on critical issues in the telecom sector. While also highlighting multiple taxations as one of the challenges the industry is battling with, he said addressing these challenges would attract more investments into the industry and propel its growth.

“This industry is fast-growing and it has been reported to have contributed over 16% to our national GDP. The industry can do much better if some of these issues we are having are addressed,” he said.