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From Adanna Nnamani, Abuja
The National Association of Telecoms Subscribers (NATCOMS) has threatened to pursue its planned legal action against the federal government over the the 5% excise duty on telecom services unless it is is completely withdrawn.
NATCOMS President, Deolu Ogunbanjo, had on Monday, told DailySun that the association would halt its plans to sue the Federal Government following the suspension of the 5% excise duty.
But in a phone conversation on Tuesday , Ogunbanjo revealed that that decision had been reversed.
According to him, the association now seeks a total withdrawal of the proposal to avoid government from lifting the suspension and going forward with the tax later.
Ogunbanjo said: “We are holding a National Executive Council meeting of the association on Friday to make sure that the tax is completely withdrawn and not only suspended. The meeting will determine if we should proceed with the court case or not because suspending it means they can bring it on later.
The Minister of Communications and Digital Economy, Isa Pantami, had announced the suspension on Monday at the inauguration of the committee on the review of the 5% excise duty in the telecoms sector and hailed President Buhari for granting his prayers.
On why he kicked against the excise duty, Pantami said the ICT sector was over burdened by so many 41 categories of taxes at the federal and state levels.
However, the Director-general of the Budget Office, Ben Akabueze, while speaking on a Television program on Wednesday, insisted that the tax remains in effect as the Budget Office of the Federation and the Federal Ministry of Finance, Budget and National Planning had not been advised about the suspension.
Akabueze stressed that the five per cent tax on telecom services is part of the federal government’s expected revenue to fund the medium-term expenditure framework and that the bill had been passed into law.
“There are extensive studies on this subject about the taxation of telecommunication companies in Africa and other developing countries, and I assure you that the average effective tax rate, which is called the AETR on telecommunications, in Nigeria is below the African average. There are several countries in Africa where the AETR on telecommunications is over 90 per cent which is giving rise to the concerns that in some places they may currently be overtaxed, but certainly not in Nigeria.
“Again, on this continent, as of today, we have the lowest tax to GDP ratio. And so, at a time when we face existential revenue challenges, I think that we all need to be really circumspect about what views we take on this matter.
“This wasn’t something that the Ministry of Finance woke up and introduced. The finance bill went through the Federal Executive Council; it went to the National Assembly as, an executive bill from Mr. President, there were public hearings, and at the end of the day they passed it into law.
“Let me say, I don’t know about the suspension, I mean, this is the law now. So, I haven’t heard beyond what I’ve read in the media. We haven’t been advised about the suspension. So, for instance, recently, the Federal Executive Council passed the medium-term expenditure framework for 2023 and 2025. That includes projections for this tax; that framework is currently before the National Assembly in the last two weeks, and the Finance Committee of the National Assembly has been holding engagements with agencies of government on this.
“So, when we are formally advised that this is no longer applicable, then we will have to rework the medium-term expenditure framework. What that means is, of course, that the projected revenues will diminish, and the deficits would increase, which means that we either have to cut back on expenditure or increase debt,” he added.
