Telcos abort heading to court as FG suspends 5% telecoms tax

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Telecommunications companies on the platform of the National Association of Telecoms Subscribers (NATCOMS) are rescinded their plans to sue the Federal Government following the suspension of the 5% excise duty by the Federal Government in its efforts to increase revenue from non-oil sectors.

The Minister of Communications and Digital Economy, Isa Pantami, who announced the suspension on Monday at the inauguration of the committee on the review of the 5% excise duty in the telecoms sector, Pantami hailed President Buhari for granting his prayers.

“It is because of this the president has granted my prayers. Number one, immediate suspension of excise duty in the digital economy sector, and number two, he approved that a committee be constituted to look into the matter carefully and advise him accordingly. This committee is to be Chaired by the Minister of Communications and Digital Economy.

“The President has appointed me to be his eyes and ears in the sector and it is my responsibility to ensure we are just and fair to the operators, government and most importantly our people that are the consumers,” Pantami stated.

On why he kicked against the excise duty, Pantami said the ICT sector was overburdened by so many 41 categories of taxes at the federal and state levels.

Pantami noted that prices of products and services in other sectors have increased significantly but the prices of products and services in the telecom sector have not increased significantly in the last three years. Because of the economic situation in Nigeria.

Reacting to the development, Deolu Ogunbanjo, President, National Association of Telecoms Subscribers (NATCOMS), said it was most soothing.

“It is a welcome development. We were already preparing our court case. We were going to court because there were already 39 taxes. Every stakeholder including Pantami is on the same page on this issue except the Minister of Finance who is supposed to be a mother. A mother who just wants to impoverish her children. That is not right. Other countries where they claim such taxes are collected do not have 39 other taxes like Nigeria. So it’s a good development. I thank the Minister for suspending it and we will now suspend our court case,” he said.

Also reacting, Mr Ikechukwu Nnamani, President, Association of Telecommunication Companies of Nigeria (ATCON) said the suspension was a welcome development as the tax would have created a financial burden on the citizens.

“I am glad the Federal Government has suspended it,” he added.

The 5% telecoms took a controversial dimension last month when the Minister of Finance Budget and National Planning Mrs Zainab Ahmed lampooned Pantami, over his objections to the implementation of a five per cent tariff hike on calls, SMS and data, saying his actions betray the 2020 Finance Act, where the government drew the strength to implement the new tax rule.

Ahmed through her Spokesman, Tanko Abdullahi, wondered why Pantami was attempting to rock the boat, when he was part of the drafting of the 2020 Finance Act that eventually secured the blessings of the Federal Executive Council (FEC) and the National Assembly.