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5% Telecommunication Tax Stands; Says DG Budget Office

The Director General of the Budget Office of the Federation, Ben Akabueze has maintained that the 5 percent telecommunication tax is still effective



Telecommunications - Investors King

The Director General of the Budget Office of the Federation, Ben Akabueze has maintained that the 5 percent telecommunication tax is still effective as the Budget Office of the Federation and the Federal Ministry of  Finance, Budget and National Planning had not been advised about the suspension.

Ben Akabueze opposed the position of the Minister of Communication and Digital Economy. 

Investors King had earlier reported that the Minister of Communication and Digital Economy, Isa Pantami had announced that the Federal Government has suspended its proposed 5 percent excise duty on telecommunication services. 

The Ministry made the declaration on Monday during the inaugural meeting of the Presidential Committee on Excise Duty For Digital Economy where he lamented that the telecommunication sector is already overwhelmed by excessive and multiple taxations. 

Contrary to the position of the minister, Ben Akabueze stressed that the five percent tax on telecommunication services is part of the federal government’s projected revenue to fund the medium-term expenditure framework which has been passed into law.

Speaking on Arise News Television, Akabueze argued that a suspension of the 5 percent telecom tax will spell doom for the 2023 budget as it would further increase the budget deficit. 

He disclosed that there were several consultations with telecommunication operators before the bill was passed into law.

“This wasn’t something that the Ministry of Finance woke up and introduced. The finance bill went through the Federal Executive Council; it went to the National Assembly as, an executive bill from Mr President, there were public hearings, and at the end of the day they passed it into law” He said. 

“Let me say, I don’t know about the suspension, I mean, this is the law now. So, I haven’t heard beyond what I’ve read in the media. We haven’t been advised about the suspension. So, for instance, recently, the Federal Executive Council passed the medium-term expenditure framework for 2023 and 2025. That includes projections for this tax; that framework is currently before the National Assembly in the last two weeks, and the Finance Committee of the National Assembly has been holding engagements with agencies of government on this.

“So, when we are formally advised that this is no longer applicable, then we will have to rework the medium-term expenditure framework. What that means is, of course, that the projected revenues will diminish, and the deficits would increase, which means that we either have to cut back on expenditure or increase debt,” he concluded. 

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Telecom Networks Capable of Massive Digital Banking, Not to be Blamed For Failed Transactions– NCC




The Nigerian Communications Commission, NCC has assured citizens of the capacity of Telecommunication companies in the country to deliver hitch-free digital banking services.

This is as the NCC stated that telecommunication networks should not be blamed for failed bank transactions and difficulties in electronic payment encountered by bank customers.

Investors King gathered that bank users and experts have complained about the slow online banking services and failed transactions, holding telecom networks responsible for the hitches amidst the current cash crunch bedeviling the nation.

The Vice Chairman, NCC, Prof. Umar Danbatta, during an event to commemorate the ‘2023 World Consumer Rights Day’ in Abuja on Wednesday, noted that Nigeria’s telecommunication companies can operate effectively regardless of the rise in the use of online banking systems since the last quarter of 2022.

Danbatta said the NCC has enforced more policies in tune with the enhancement of access to broadband connectivity across the country.

He stated that the commission’s Computer Security Incident Response Team has been effective in drawing the attention of consumers to cyber threats and bullying which could have made them expose their financial details into wrong hands.

Speaking on the benefits of the 5G network, Prof. Danbatta said the 5G will attract more telecommunication infrastructure and resources which will in turn cause a rise in the demand and use of data services. 

He added that the increased demand in data services will improve the rate of energy consumption for the telecommunication network infrastructure.

“By the time cashless banking fully took off in late 2022, the connectivity platforms on which electronic transactions ride have become robust to the extent of being able to absorb the surge in demand for cashless transactions.” Danbatta said.

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Telecoms Operators in Nigeria Roll Out Unified Short Codes For Customers



USSD - Investors King

Telecommunications operators in Nigeria have begun to roll out unified Unstructured Supplementary Service Data (USSD) codes or shortcodes for customers.

This development is happening half a decade after the Nigerian Communications Commission (NCC) published a report advocating for the consolidation of shortcodes in Nigeria.

The purpose of this standardization is to simplify shortcodes and create a more cohesive regulatory atmosphere across the nation.

During an event attended by executives from various sectors including Mobile Network Operators (MNOs), Bank Executives, Representatives from CBN, Value Added Service (VAS) Licensees, and Executives of the Wireless Application Services Providers in Nigeria (WASPAN), Engr. Paul Dinwoke, the Chief Executive Officer of Molcom Multi-Concepts Limited, the Project Consultants carrying out the Short Code Harmonization, explained that the purpose of the harmonization project is to ensure that the licensing and utilization of shortcodes in Nigeria is in line with the requirements of International Telecommunication Union (ITU) and international best practices.

The licensed telecommunications operators of Nigeria (ALTON) also spoke on the launch of unified USSD shortcodes, stating that the implementation of these shortcodes will result in a streamlined process for standard shortcodes across the industry, bringing relief to subscribers through the modernization of single services across all networks, and providing a balanced regulatory framework consistent with global practices.

ALTON disclosed that network operators are currently implementing the shortcodes in collaboration with the NCC and subscribers have adequate time to adjust. The migration process is expected to be completed by May 17, 2023, during which both old and new common codes will run concurrently before the old ones are discontinued.

The proposed harmonized shortcodes are:

  • Call Center/Help Desk – 300
  • Voice Mail Deposit – 301
  • Voice Mail Retrieval -302
  • Borrow Services – 303
  • STOP Services – 304
  • Check Balance – 310
  • Credit Recharge – 311
  • Data Plan – 312
  • Shared Services – 321
  • Data Plan Balance – 323
  • Verification of SIM Registration/ NIN – SIM Linkage – 996
  • Porting Services (MNP) – 2442

Before now, every operator had its unique code for balance inquiry, airtime recharge, and borrowing credit, among others. With the rollout of unified codes, banks and telecoms customers will not need to struggle with memorizing different codes.

Investors King understands that unified shortcodes are commonplace globally.

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Mobile Technology Continues to Drive Growth in Nigeria’s Telecommunications Sector




Nigeria’s mobile technology sector continues to experience sustained growth, with the total number of mobile subscriptions reaching 225.88 million in January 2023.

This represents a significant increase of 3.66 million more mobile subscriptions than the previous month.

New industry data from the Nigerian Communications Commission reveals that the teledensity, which measures the number of active telephones per 100 people living in an area, grew to 118.51 per cent in January. This highlights the widespread adoption of mobile technology in Nigeria, with mobile subscriptions on MTN Nigeria growing to 91.95 million, 60.56 million on Airtel, 60.34 million on Globacom, and 13.03 million on 9mobile.

The growth of the mobile technology sector has also led to increased broadband penetration, which reached 48.20 per cent in January, with the number of mobile Internet subscriptions reaching 155.68 million. This is a significant step towards the government’s target of achieving 50 per cent broadband penetration by 2023.

The mobile industry’s contribution to the Nigerian economy cannot be overlooked. In 2022, it contributed N10.13tn in real terms, translating to economic gains for the country.

Additionally, mobile technologies have played a critical role in driving digital inclusion and financial inclusion, with mobile connectivity being the predominant form of connectivity in Nigeria, according to the GSMA.

In January 2023, mobile transactions grew by 230 per cent, demonstrating the role that mobile technology is playing in driving the country’s financial inclusion agenda. The widespread adoption of mobile technology is driving investment in network coverage, bringing connectivity to even more people across the country.

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