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Amid Controversy, Nigerian Government Announces an Income of N127.03bn from Calls, SMS, VAT

Amid the controversy surrounding the proposed five per cent excise duty on telecommunication services, the Federal Government has announced an income of N127.03 billion from Value Added Tax, VAT on calls, SMS, data, and other information and communication services in the first half, H1 of 2022.

According to data from the National Bureau of Statistics, NBS, this figure represents 10.69 percent of the total amount of N1.19 trillion that was collected as VAT within the period under review.

Other sectors which had a huge contribution to the total amount of N1.19 trillion include Manufacturing with 33.08 per cent; Information and communication with 18.98 per cent; and Mining & quarrying with 10.60 per cent.

Recall there has been a running battle concerning the proposed five percent excise duties slammed on telecoms services.

The Ministry of Finance and the Nigerian Customs Service had recently announced plans to start implementing the proposed five percent exercise duties on telecommunication services and beverages in 2023.

This move was countered by the Minister of communications, Isa Pantami after successfully persuading the President to suspend the move.

Not satisfied with the outcome of Pantami’s deliberation with the President, the Director, Budget Office, Ben Akabueze, justified the five percent tax on telecom services noting that when the idea to set up the excise taxes on telecom services came up 4 years ago, at least 21 African countries had instituted the same action and it was realized that Nigeria currently has the lowest tax to GDP ratio in the continent.

The Government’s aim to increase tax revenues comes amid dwindling oil revenues but despite contributing a large chunk of VAT revenues, the government still plans to add a five per cent excise duty on telecom services, a move which will increase telecoms consumption tax to 12.5 per cent.

While shutting down the 5% tax payment, the communications minister also revealed that the major challenge of the Information and Communications Technology sector is excessive taxation from having to pay a total of 41 taxes.

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