The Federal Government has AA announced the suspension of its planned five percent excise tax on telephone calls and data tariffs in the country till further notice.
Minister of Communications and Digital Economy, Isa Pantami, said the proposed excise duty on telecommunication services was suspended because the timing was wrong.
The government had announced the planned introduction of five percent excise duty tax on all voice calls and other telecommunications services, including SMS, and data services.
The implementation of the new tax regime was to be in addition to the existing 7.5 percent Value Added Tax (VAT) paid by Nigerians for goods and services across all sectors of the economy.
Criticisms and condemnations by concerned Nigerians and consumer rights groups trailed the announcement of the new tax regime, as Nigerians described the introduction of additional tax on the people as insensitive on the part of the government.
Justifying the new tax, Minister of Finance, Budget and National Planning, Zainab Ahmed, said the tariff hike to be collected monthly by telecom operators and paid to the government on or before 21st of every month.
The Minister said the five percent excise duty was approved by President Muhammadu Buhari in the Finance Act 2020, but was never been implemented.
But the Minister of Communications, Pantami, had strongly opposed the new tax, claiming his ministry was not consulted before the decision was taken.
Besides, Pantami said the communications sector was already overburdened by excessive and repeated taxes.
With 7.5 percent value added tax already in existence, he argued an additional 5 percent excise tax on telephone calls and communication services would raise total tax to 12.5 percent.
However, despite the opposition by Pantami, the Finance Minister insisted the government was determined to go ahead with its implementation, as a circular stating the planned hike was addressed to all ministries and agencies of government.
But, surprisingly on Monday Pantami announced that the planned excise duty on telecommunication services has been suspended.
He spoke at the inaugural meeting of the Presidential Committee on Excise Duty for the Digital Economy Sector in Abuja.