‘We were not consulted over 5% Telecoms Tax’ – Pantami, blames security agencies for high crime rate despite SIM-NIN linkage

Minister of Communications and Digital Economy, Professor Isa Pantami, says his ministry was not consulted before the planned implementation of the controversial five percent excise duty on telecommunication services in the country.

Pantami also warned that the process was ill-timed and undermined government’s desire to be responsive to the challenges in the industry.

It would be recalled that last Monday, the Ministry of Finance, Budget and National Planning announced plans to effect a 12.5 per cent tax on calls and data services provided by telecommunications companies as it moved to implement the 5 per cent inclusive excise duty on operators’ services in the country.

The announcement was immediately trailed by disapproval by the Association of Licensed Telecom Owners of Nigeria which insisted that the burden of payment would have to be passed on the consumers.

The Minister, Ms Zainab Ahmed, who disclosed this at a stakeholders’ forum on implementation of excise duty on telecommunications services in Nigeria in Abuja organised by the Nigerian Communications Commission (NCC), also informed that the proposed five per cent will be added to the already existing 7.5 per cent Value Added Tax (VAT) on telecommunications services.

Ms. Ahmed, who was represented by the Assistant Chief Officer of the Ministry, Frank Oshanipin, said the five per cent excise duty has been in the Finance Act 2020 but was not implemented.

She said the delay on its implementation was as a result of government’s engagement with stakeholders.

“Payments are to be made on monthly basis, on or before 21st of every month. The duty rate was not captured in the Act because it is the responsibility of the president to fix rate on excise duties and he has fixed five per cent for telecommunication services which include GSM. It is public knowledge that our revenue cannot run our financial obligations, so we are to shift our attention to non oil revenue. The responsibility of generating revenue to run government lies with us all,” she said.

However, responding, the Chairman, Association of Licensed Telecom Owners of Nigeria (ALTON),Gbenga Adebayo, said the burden would be on telecommunications consumers.

“It means that subscribers will now pay 12.5 per cent tax on telecom services, we will not be able to subsidise the five per cent excise duty on telecom services. This is as a result of the 39 multiple taxes we already paying coupled with the epileptic power situation as we spend so much on diesel,” he noted.

Executive Secretary of ALTON, Gbolahan Awonuga, said the five per cent excise duty was not healthy for the industry.

According to Mr. Awonuga, the telecom service providers were already paying two per cent of their annual revenue to the NCC.

“We pay two per cent excise duty to NCC from our revenue, 7.5 per cent VAT and other 39 taxes. We are going to pass it to the subscribers because we cannot subsidise it,” he said.

On his part, the President of the Association of Telecommunications Companies of Nigeria (ATCON), Ikechukwu Nnamani, said the five per cent excise duty on telecom services did not conform with present realities.

Mr. Nnamani was represented by the Executive Secretary, Ajibola Alude, said that the state of the industry was bleeding and suggested that the five per cent excise duty be stepped down as it could lead to job losses.

“It is not well intended, because the industry is not doing well currently,” he said.

Executive Vice Chairman of the NCC, Professor Umar Danbatta, in his remarks, said the Excise Duty was to have been implemented as part of the 2022 fiscal policy measures.

Mr. Danbatta said the industry had considered the earlier scheduled commencement date of June 1, inadequate and duly took this up with the federal government.

“We consider it imperative that these implementing agencies should also meet directly with telecoms industry stakeholders to address areas of concern.

“As the regulator of the telecoms industry, we are responsible for ensuring that industry stakeholders understand their fiscal and other obligations, so that they can maintain full compliance with government policy.

“These engagements enabled us to better understand the objectives and proposed implementation mechanisms of the excise duty,” he assured.

Danbatta added that the excise duty covered both pre-paid and post-paid telecommunications services.

Meanwhile, speaking at the maiden edition of Nigerian Telecommunications Indigenous Content Expo (NTICE), organised by the Nigeria Office for Developing Indigenous Telecoms Sector (NODITS) of the Nigerian Communications Commission (NCC), Tuesday, Pantami expressed worry that further taxing the sector could impact negatively on its contribution to the country’s Gross Domestic Product (GDP).

“I have not been contacted officially. If we are, we surely will state our case. The sector that contributes to the economy should be encouraged. You introduce excise duty to discourage luxury goods like alcohol, broadband is a necessity. If you look at it carefully, the sector contributes two per cent excise duty, 7.5 per cent VAT (value added tax) to the economy and you want to add more.”

The event which had as its theme; ‘Stimulating the Development of Indigenous Content through Innovation and Commercialisation,’ attracted the presence of the Governor of Lagos State, Mr. Babajide Sanwo-Olu, who was represented by his Special Adviser on Innovation and Technology, Mr. Tubosun Alake; Chairman, Senate Committee on Communications, Senator Oluremi Tinubu, represented, Chairman, Board of Commissioners of the Nigerian Communications Commission, Professor Adeolu Akande, and President, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, among others.

On the issue of rising crimes despite the order on telecoms providers to link subscribers telephone lines with the national Identity Number (NIN), the Minister said it reflects the lapses in security agencies not the SIM registration.

The minister expressed disappointment at the inability of various security agencies to checkmate kidnapping, banditry and other crimes despite the stringent regulations around Subscriber Identity Module (SIM) card registration and mandatory linkage of same with the National Identity Number (NIN).

“This question should be forwarded to the various security institutions because what we have done is to establish the data base which is still work in progress. So far, we have over 86 million citizens in the data base but what I inherited in 2020 when NIMC was transferred to me was only 41 million.

“And don’t forget NIMC was established in 2007. Within 13 years, 41 million and from October 2020 till date, we increased it by 45 million and this is in less than two years more than what was achieved in the previous 14 years.

“They (security agencies) have power to access the data. They have power based on the provisions of the law; Cybercrime Act 2015. They have power for lawful interception. These have been provided by law. So they don’t need to come to us.

“So if they fail to utilise or if they have any complaint, let us know but it is not our job to say: when a crime is committed, let me have the telephone number of the criminal. The Minister of Communications has no power to do that, chairman, NCC board has no power.

“Even the Executive Vice Chairman, EVC, has no power. Our work is to provide the data base and it is here for them; verified NIN and SIM and we have done that. From January to date, more than seven months, no security institution has ever confronted me that this crime has been committed, we want you to support us, it has never happened and I think it’s the same with the EVC.

“So our work is not in any way to go into security. Our work is to provide the data base for them and we have done that and they have not complained to us in any way that they are not comfortable with the data base. It is their own work to patronise and if they want to patronise, they don’t even need to come to me,” he explained.