Subscribers to Pay More for Calls, SMS, Data as FG Proposes 12.5% Telecom Tax
- The Nigerian government plans to raise the excise duty on telecommunication services to 12.5%
- The new move, if approved, will see subscribers paying more for calls, SMS, and data service
- However, telecom companies have decried the N250 billion USSD debt owed by banks and mobile money operators
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian government’s plan to reintroduce excise duty on telecommunication services will see subscribers paying more for calls, SMS, and data.
The government is raising the consumption tax on telecom services to 12.5% from 7.5% VAT in a broader tax reform initiative contained in a new bill.
Source: UGC
New bill to increase VAT on telecom services
The new bill aims to expunge tax aspects, boost the legal frameworks on taxation, and enact the Nigerian Tax Act to provide for income taxes, transactions, instruments, and related matters.
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The proposed new legislation seeks to unify fiscal legislation on taxation in Nigeria and introduce excise duties on telecoms, gaming, gambling, lotteries, and betting services.
According to a BusinessDay report, a taxable transaction is the amount charged by the service provider for the service in money or money’s worth.
Experts say the tax will hurt subscribers and stifle telecom firms.
Subscribers reject new bill
The National Association of Telecom Subscribers President said the move would hurt subscribers and telcos.
The move to reintroduce the excise duty comes despite a 2023 execution order suspending the implementation of a five per cent excise duty on telecom services.
Telcos threaten to suspend USSD services
In another report, telecom operators said there may be service disruption if the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) fail to address the N250 billion USSD debt owed to telcos by mobile network operators.
MTN Nigeria’s Chief Executive Officer (CEO), Karl Toriola, disclosed that the telecom operators' debt is accumulating and becoming unsustainable.
He hoped the CBN and NCC would address the impasse soon, saying it might lead to the operators seeking approval to discontinue service to commercial banks to run transactions on their platforms.
He disclosed that the government's refusal to agree to telcos’ demand for tariff adjustment may lead to service disruption, as the sector is severely affected by the lack of tariff adjustment.
The Nation reports that Toriola said the complete deregulation of the downstream oil sector has increased petrol prices to over N1,000 per litre. Still, the increase has not been reflected in telecom companies' tariffs.
MTN introduces eco-friendly paper-based SIM cards
Legit.ng earlier reported that MTN Nigeria introduced paper-based, biodegradable, eco-friendly SIM cards to achieve net zero emissions by 2040, which aligns with its Project Zero goals.
The company disclosed that paper-based SIM cards are safe for the environment as they support product management throughout their life cycle, promoting circularity and reducing waste.
The development comes a week after the Nigerian Communications Commission announced plans to revise the telecom industry's corporate governance code, updating it from the 2016 code to introduce mandatory sustainability reporting for telcos.
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Source: Legit.ng
