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 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“So, when we are formally advised that this is no longer applicable, then we will have to rework the medium-term expenditure framework.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.