Nigeria has, for now, held off on plans to impose a 5% tax on telecommunications services that the Ministry of Finance and the Nigerian Customs Service had suggested would be imposed in 2023.
According to Nigeria’s Vanguard newspaper, Isa Pantami, Communications and Digital Economy Minister, successfully argued that such a tax would be counter-productive as it would increase the cost of telecommunication services, make many Nigerians worse off and widen the gap in telecoms access in the country.
These concerns were echoed by the Association of Licensed Telecom Operators in Nigeria (ALTON), which similarly worried about the tax’s effect on penetration and the costs it would impose on subscribers.
Pantami also said the saying the sector was already overburdened with taxes. In fact, as Reuters points out, his statement suggested that the sector already faced 41 different categories of tax, some of them duplications from multiple tiers of government.
Pantami has been allowed to constitute a committee which will review the tax and advise President Buhari.
This is an interesting move at a time when Nigeria is finding it difficult to generate revenue to cover its growing spending; this in turn is forcing the nation to continue borrowing to repay debt.
However it has apparently not been tempted, unlike some other governments in Africa, to impose even more taxes on telecommunications as a way to meet revenue shortfalls.
Notable recent examples were levies and taxes imposed last year in Ghana and Uganda and this year, most controversially, an annual $180 million levy on mobile services introduced in the Democratic Republic of Congo.