The minister of communications and digital economy, Prof. Isa Ali Pantami, has joined telecom operators to kick against the five per cent excise duty on calls.
Recall that the federal government recently imposed five per cent excise duty on telecommunications services, as effort to generate revenue to fund the national budget in the face of dwindling oil revenue.
Pantami, at the maiden edition of the Nigerian Telecommunications Indigenous Content Expo on Monday, in Lagos, disclosed that he will take further step to ensure that federal government reverse its decision.
“Beyond, making our position known today, we will go behind the scene and go against any policy that will destroy the digital economy sector. This is a sector we cherish so much and we are ready to go to any extent, legitimately and legally to defend its interest,” the minister said.
The minister also disclosed that the Nigerian Communications Commission (NCC) was not contacted officially, while faulting the ruling making process that didn’t involve the chairman of House Communications Committee.
“We have not been contacted officially. If we were, we would have pleaded our case. As a minister and based on the provision of the constitution of Nigeria, session 148, we are exercising power of Mr president.
“When VAT was increased to 7.5 per cent, I was not consulted, I only heard the announcement and I think there is something questionable about the process.
the same page with our national assembly members. They too were not consulted despite the fact that they are part of the committee,” he said.
Pantami hinted that the recent 2020 Q2 Gross Domestic Product (GDP) Report, released by the National Bureau of Statistics (NBS) showed that the Information Communications Technology (ICT) contributed an unprecedented 17.83 per cent to Nigeria’s total GDP, adding that the sector should be encouraged, and not discouraged by multiple taxation.
“You introduced excise duty to discourage luxury goods like alcohol. Broadband is a necessity. If you look at it carefully, Broadband contributes 2 per cent to 7.5 per cent to the economy. Imposing five per cent excise duty on operators will only bring hardship at this time, and that cannot be tolerated,” he emphasized.
Pantami advised federal government to expand the scope, by taxing other sectors, while calling on operators to come together and salvage the sector.
As part of the efforts to support indigenous companies, the minister charged the Nigeria Office for Developing the Indigenous Telecom Sector (NODITS) to strictly enforce the National Policy for the Promotion of Indigenous Content in the Nigerian Telecommunications Sector.
The minister declared that the annual outflow of foreign exchange for the telecommunications sector amounts to approximately $2.16 billion, adding that this is a significant portion of the sector average annual budget and it is critical that this trend is reversed.
According to him, “There is also a higher percentage of foreigners among top management staff when compared with other staff, with Nigerians making up to 31 per cent, in relation to foreigners who make up to 69 per cent. For software, 77 per cent of software in use are foreign, while only 23 per cent are obtained locally.”