Home BUSINESS Technology President Tinubu Suspends 5 Percent Excise TAX On Telecom Services, Excise Duties

President Tinubu Suspends 5 Percent Excise TAX On Telecom Services, Excise Duties

President Bola Tinubu has signed into law the suspension of the five percent Excise Tax on telecommunication services as well as the Excise Duties escalation on locally manufactured products.These are part of the four Executive Orders which was signed on Thursday, 6 July.

The Special Adviser to the President on Special Duties, Communications and Strategy, Dele Alake, announced this on Thursday while briefing journalists at the State House in Abuja.

He said that the President also signed the Finance Act (Effective Date Variation) Order 2023, which now defers the commencement date of the changes contained in the Act from 23 May, 2023, to 1 September, 2023.

According to the presidential spokesman, this is to ensure adherence to the 90-day minimum advance notice for tax changes as contained in the 2017 National Tax Policy.

President Tinubu also signed The Customs, Excise Tariff (Variation) Amendment Order, 2023, shifting the commencement date of the tax changes from 27 March, 2023, to 1 August, 2023 and also in line with the National Tax Policy.

The President also ordered the suspension of the newly introduced Green Tax by way of Excise Tax on Single-Use Plastics, including plastic containers and bottles as well as the suspension of Import Tax Adjustment levy on certain vehicles.

Alake explained that the President issued these orders to ease the negative impacts of the tax adjustments on businesses and chokehold on households across affected sectors.

He reiterated the President’s commitment to reviewing complaints about multiple taxation, local and anti-business inhibitions.

He also noted that President Tinubu’s administration will, therefore, continue to give requisite stimulus by way of friendly policies to allow businesses to flourish in the country.

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The President assured Nigerians that there will not be further tax raise without robust and wide consultations undertaken within the context of a coherent fiscal policy framework.

This order officially puts into signing the move carried about by former president Muhammadu Buhari-led administration, which in late March announced the exemption of the Nigerian digital economy from the proposed 5 per cent excise duty introduced in 2022.

Then Minister of Communications and Digital Economy, Mr Isa Pantami, opposing the move, said this was in line with the recommendations of the committee constituted to review the applicability of the duty to the telecom sector, which is considered already overburdened with taxation and sundry levies.

According to a statement, Mr Pantami said the justifications for the exemptions were based on three premises.

First was the fact that operators in the telecoms sub-sector of the digital economy industry currently pay no fewer than 41 different categories of taxes, levies and charges.

Another was that telecoms have continued to be a major contributor to the Nigerian economy in terms of Gross Domestic Product Contribution (GDP), and last was the fact that the telecom sector was the only sector where the cost of service has been stable and in many cases continued to go down over the past years.

In August 2022, the federal government announced that it would begin implementing the proposed excise taxes on telecommunications and beverage services in 2023.

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