Connect with us

Telecommunications

Call, Data Rate to Jump 100% as FG Imposes 5% Excise Duty on Telecoms

Call and Data rates could jump as much as 100% once the Federal Government implemented 5% excise duty on telecommunication services

Published

on

Services Tax

Call and Data rates could jump as much as 100% once the Federal Government implemented 5% excise duty on telecommunication services, a source from the sector stated.

According to industry experts, the increment will not only impact subscribers but also increase tax burden on telcos which would translate into rise in tariffs.

This, experts explained would increase the total consumption tax on the sector from just the 7.5% Value Added Tax (VAT) to 12.5%, a situation they said would worsen Nigerians’ economic status given the ongoing happenings in the country.

If implemented, Nigerians are now expected to be paying as much as N40 a minute, up from N20 and could be paying up to N2,500 per gigabyte.

Last week, Isa Pantami, Nigeria’s Minister of Communications and Digital Economy, decried the new tax, threatening to take the Federal Government to court for overburden the industry with so much taxes at a time when the telecommunication sector and the entire Nigerian economy was not faring well.

He said: “The 5 percent excise duty will overburden the industry. As a Minister, I was neither consulted nor obtained a memo to that effect. Even the appropriate lawmakers that were supposed to be talked with have also told me they were not.

”Things are not done that way. Besides condemning the tax, we will take every lawful step to guarantee that the tax does not stand.”

However, Ahmed Zainab, Nigeria’s Finance Minister, had different excuse for going ahead with the new 5% excise duty. According to her, the new 5% excise duty was in line with 2020 Finance Act and was part of Federal Government efforts at augmenting the nation’s revenue, especially from the non-oil sector.

The National Association of Telecoms Subscribers and the Nigerian Telecommunication Consumer have joined Pantami and other Nigerians to kick against the decision they considered wicked and inconsiderate.

Chief Adeolu Ogunbajo, president National Association of Telecoms Subscribers (NATCOMS) also added his voice. He said the sector is barely holding its ground with the existing 7.5 percent VAT, additional 5 percent will sum the total VAT in the sector to 12.5 percent. This is a killer move on the sector, he said.

Continue Reading
Comments

Telecommunications

USSD Service May no Longer be Available as Network Providers Threaten Banks

Network providers have threatened to halt the Unstructured Supplementary Service Data (USSD) offered to the financial institutions operating in the country due to N80 billion unpaid debt.

Published

on

Services Tax

Network providers have threatened to halt the Unstructured Supplementary Service Data (USSD) offered to the financial institutions operating in the country due to N80 billion unpaid debt.

Investors King learnt that the Association of Licensed Telecommunications Operators of Nigeria (ALTON) says it might be forced to stop Unstructured Supplementary Service Data (USSD) services because banks have failed to pay for services rendered.

Speaking at a conference in Lagos, ALTCON chairman, Mr Gbenga Adebayo lamented that the debt which stood at N42 billion earlier this year has now risen to N80 billion. 

Adebayo noted that despite the government’s effort to resolve the matter, many banks were not cooperating as regards paying their debt. 

He further disclosed that the telecom operators might have to disconnect the banks from the USSD service until they do the needful.

It will be recalled that in March 2021, telecommunication operators had threatened to withdraw their USSD services to financial institutions due to the N42 billion accumulated debt.

The huge debt was a result of the deduction from the commission during the transactions. However, the banks failed to remit to the telecommunications operators who own the infrastructure used for the transactions. 

The USSD service has become an integral part of the Nigerian banking system. Some of the services available on USSD include money transfer, checking of account balance and buying mobile airtime.

Other services which can be carried out on USSD include buying data and generating bank statements or pin codes.

No doubt, the USSD service has significantly helped to drive the CBN cashless policy and financial inclusion. 

It is believed that millions of Nigerians who do not have a smartphone or run out of data or internet connection often resolve to the USSD service. Billions of naira are transacted every day through USSD. Statista reported that the value of USSD transactions in 2020 was a whopping N550 billion. 

Continue Reading

Telecommunications

MTN Partners With Ericsson on 5G Internet Connection

The largest Telecommunication company in Africa, MTN has partnered with Ericsson for its 5G network in Nigeria. 

Published

on

MTN

MTN Nigeria has partnered with a world-renowned telecommunications hardware, software and service provider, Ericsson to launch 5G technology and Radio Access Network in Nigeria. 

The Chief Executive Officer (CEO) of MTN Nigeria, Karl Toriola said that MTN will combine the strength it used to expand its 2G, 3G and 4G networks to expand its 5G network across the country in the coming months. 

Toriola also recognised the Minister of Communication and Digital Economy, Professor Isa Pantami for his role and leadership in his capacity as minister which has been beneficial to the telecommunication industry.

It will be recalled that in December 2021, MTN and Mafab Communications Limited won the bid for the 5G spectrum auctioned by the Nigerian Communications Commission at the Transcorp Hilton Hotel in Abuja.

The partnership with Ericsson will help MTN to provide revolutionised 5G network services to its numerous customers in Nigeria. The 5G network will be critical in unlocking the potential of the Internet of Things (IoT), Artificial Intelligence (AI) and Virtual Reality for millions of users in Nigeria. 

Hossam Kandeel, Vice President of Ericsson Middle East and Africa was quoted to have said ” We (Ericsson) are proud to be a part of Nigeria’s 5G digital transformation that has only just begun.

“With connectivity being the backbone of digitization, we are committed to delivering the best service to our partners at MTN Nigeria to support them in this thrilling journey.”

On his part, MTN Chief Technical Officer (CTO), Mr Muhammed Rufai who also witnessed the event said “5G will revolutionise the way we live and communicate across industries. With the speed 5G offers, we will be able to experience the Internet with low latency, which means no lag, making our virtual interactions more real.

“At MTN, we will continue to pursue the rollout of 5G technology to revolutionise Internet access across the continent.” 

 

Continue Reading

Telecommunications

NCC Projects N500 Billion Revenue From 5G Spectrums License

The Nigerian communication commission (NCC) has revealed plans to generate N500 billion in revenue from the auctioning of the 5G spectrums in 2023.

Published

on

5G

The Nigerian communication commission (NCC) has revealed plans to generate N500 billion in revenue from the auctioning of the 5G spectrums in 2023.

This disclosure was made by the Executive Vice Chairman of the NCC, Prof. Umar Danbatta, who spoke in an interactive meeting on the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP), organized by the Senate Committee on Finance.

He stated that the projected revenue would be realized from the auctioning of two 5G spectrums, adding that the commission had already begun the bidding process for auctioning of the spectrums.

Prof. Danbatta disclosed that in the first quarter of 2022, the commission generated N257 billion while it remitted N195 billion to the government coffers.

The NCC boss added that from April to August, N318 billion was generated while N214 billion was remitted. He revealed that the funds raised by the commission were occasioned by the auctioning of two 5G spectrums at the rates of $263 million and $273 million.

He said “The NCC from 2017 to 2021 had generated N799bn and remitted N423bn to the government.

“The target was to hit 75 percent penetration in 2025. Hopefully, we will achieve 50 percent penetration by end of 2022.”

Prof. Danbatta further advised Nigerians not to hesitate to make use of the 112 emergency national numbers in case of any emergency incident, such as fire outbreaks, or accidents, among others, and a toll-free number, 622, to lodge complaints on issues relating to drop calls.

Prof. Danbatta last year disclosed the readiness of the commission to deploy its mandate to boost the nation’s economy and ensure national development from the 5G spectrum, adding that the commission will launch a book to provide more insight into the workings of NCC under his watch.

The Chairman of the Committee, Senator Olamilekan Adeola, added that the Senate would continue to encourage NCC to improve its revenue generation profile to the Federal Government.

He further stated that the expected NCC revenue in 2023 would help reduce the deficit proposed in the 2023 budget.

Continue Reading
Advertisement
Advertisement




Advertisement
Advertisement
Advertisement

Trending