… Says minister can’t claim ignorance of FEC-approved policy
Finance, Budget and National Planning Minister Zainab Ahmed on Thursday criticized Communications and Digital Economy Minister Isa Pantami’s opposition to the 5% increase in data calls.
Zainab made his position known in a statement issued by his media adviser, Yunusa Abdullahi and made available to THE WHISTLER.
The federal government had announced its intention to implement the new rate increase of 5% on calls and data.
The government has announced that it will start implementing a 5% excise tax on all voice calls, SMS and data services, in addition to the 7.5% value added tax already paid for goods and services in all sectors of the economy.
But soon after the new tax rate was announced, Pantami rejected the planned implementation, saying he was never consulted during the conceptualization phase of the policy.
He had expressed his disapproval of the policy at a telecommunications forum in Lagos, organized by the Nigeria Office for Developing the Indigenous Telecoms Sector, an agency domiciled at the Nigeria Communications Commission.
Pantami had said he would explore all legitimate means to end the planned 5% excise tax on telecom consumers due to lack of time and process to impose the tax on the telecom industry.
He had insisted that part of the responsibility of a responsive government was not to make the challenges facing citizens worse.
Once implemented, the excise duty would increase to 12.5 percent. Telecom operators had also said the burden would be passed on to consumers.
Pantami had said: “The Ministry of Communications and Digital Economy is not happy with any effort to introduce excise duties on telecommunications services.
“First, I was not formally consulted and part of the regulations is to invite stakeholders to make contributions, I was not formally consulted. Second, if we had been contacted, we would have challenged the submission .
The sectors that contribute to our economy today are few. What we should be doing is ensuring that all other sectors can also contribute. Many sectors are consumers, these are the sectors that we should be responsible for contributing.
“A sector cannot be a consumer today; each sector must contribute a certain percentage to the economy. And if we didn’t, we would increase the pressure and, in doing so, we would destroy the sector of the digital economy.
“Excise duties are introduced to discourage the consumption of certain products like alcohol and tobacco. But today, without broadband penetration, how can you conduct financial transactions, how can you give lectures without it how can you work in a hospital, these services are a necessity.”
But in reaction to Pantami’s comments, Zainab said the communication minister cannot pretend to ignore the plan to implement a 5% increase in data calls because the policy has gone through the Federal Executive Council which he is a member.
She said: “Given the position of Professor Pantami, one could wonder if he was absent from the whole of the processes which culminated in the finance law, which is a product of both the Assembly National and the Federal Executive Council.
“Suffice it to say that before the law, the finance bill would have been by the FEC of which Professor Pantami is a member and the National Assembly. In other words, he participated in the development of the finance law which sets out the said policy of increasing excise duties.
“Therefore, he obviously could not have had a point in his dissenting opinions, even if the National Assembly could not have contradicted itself on this question, because the parliament had passed the finance bill before the President Muhammadu Buhari signs it.”
The minister added that the 5% excise duty was included in the 2020 finance law, but was never implemented.
“From now on, the 5% excise duty will be collected by telecommunications operators and paid to the federal government on a monthly basis, no later than the 21st of each month,” she added.
She indicated that apart from the FEC, a circular has been circulated to all stakeholders, adding that the finance bill which is the instrument on which the increase is based has passed through the National Assembly.
She said the circular with the reference number. F. 17417/VI/286 dated March 1, 2022 and titled “Approval for the Implementation of 2022 Fiscal Policy Measures and Tariff Changes” was addressed to various Ministers including the Minister of Communications and Economy digital and other heads of government agencies.
The circular was also addressed to the Secretary of the Federation Government, Attorney General of the Federation, Ministers of Industry, Trade and Investment, Agriculture and Rural Development, Mines and Steel and Development.
The others are the ministers of health, aviation, information and culture, budget and national planning.
Other heads of agencies copied in the circular are the Accountant General of the Federation, the Comptroller General of Customs, the Governor of the Central Bank of Nigeria, the Executive Chairman of the Federal Inland Revenue Service and the Director General of Research and development of raw materials. advice, among others.
Part of the circular signed by the Minister of Finance reads: “This is to convey that His Excellency Mr. President has approved Additional Protective Measures (MES) for the implementation of the Common External Tariff (CET) of ECOWAS 2022-2026 and excuses duties on soft drinks, cigarettes and tobacco products as well as telecommunication services as of April 1, 2022.
“A grace of 90 days from the date of implementation of this circular, i.e. April 1, 2022, is granted to all importers who have opened the M form and must have entered into an irrevocable commercial agreement before entry of this circular to process and clear such goods at the prevailing rates of duty.
“However, new import transactions concluded from April 1, 2022 will be subject to the new import duty regime.”
The number of telecommunications subscribers continues to grow significantly, from approximately 180 million subscribers in 2019 to over 200 million active subscriptions in 2020.
This represents an increase of more than nearly 11% in the total number of subscriptions.
Many sub-Saharan African countries such as Tanzania, Uganda, Malawi, Kenya, Rwanda, Ghana and Burundi currently impose excise duties on telecommunications services ranging from 5 to 20%.