Nigerians will pay double for calls and data as the federal government plans to hike the consumption tax on telecom services.
This follows a disclosure by the government that it plans an upward five percent excise duty tax on telecom services, increasing the total consumption tax on telecom services to 12.5 percent.
The new tax regime, according to industry sources, will not only affect subscribers but also add tax burden on the telcos which would translate into rise in tariffs, Bellnews Online said.
Industry experts say that should the five percent tax be implemented, Nigerians will now pay forty naira per minute call from the initial twenty naira. And data tariffs could also go up to about N2,500 per gigabyte.
The finance minister, who unveiled the plan at a stakeholders’ forum on the implementation of excise duty on telecommunications services in Nigeria organized by the Nigerian Communications Commission (NCC), said the 5 percent excise duty was in the Finance Act, 2020.
She said the accrued taxes would be remitted on monthly basis, on or before 21st of every month.
The move, according to the minister, was part of effort by the government to boost non-oil revenue in the face of dwindling income, especially from the oil sector.
The proposal has, however, set Minister of Finance, Budget and National Planning, Zainab Ahmed, and the Minister of Communication and Digital Economy, Prof Isa Ali Pantami, on collision course.
While the Ministry of Finance cites presidential approval to apply the new excise on telecommunication services, as provided by the Finance Act, the Ministry of Communication and Digital Economy is kicking on the ground that the new tax would be harmful to the sector and to subscribers.