Telecom sector should be exempted from excise duties

The Executive Vice Chairman, Nigeria Communications Commission, Professor Umar Danbatta, on Thursday, advocated for the exemption of the telecommunications sector from excise duties.

Danbatta, who spoke at the Telecom Executives and Regulatory Forum in Lagos, underscored the critical role of the sector in driving the country’s economic growth, adding that telecom services should be classified as an essential service rather than a luxury.

The President, Bola Tinubu, in July, suspended the 5 per cent excise tax on telecommunications in the country.

While commending the move by the president, Danbatta, however, made a strong case that the telecom sector should be completely exempted from excise duties.

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He said, ”The government of His Excellency, President Tinubu again suspended the excise duty. This is a good sign. I assure you we’re going to continue to argue convincingly that the duty on telecommunication services should not only be sustained but should completely go.”

Danbatta highlighted the potential repercussions of subjecting the telecom sector to excise duties, stating that it could adversely impact the lives of over 200 million Nigerians, who rely on the services for communication, information access, and economic opportunities.

“Telecommunication services should be exempted from excise duty because excise duty is on luxury items. That the definition and telecommunication services cannot be considered as a luxury. You know, they are a necessity. You know they have become very much about our individual lives. And they affect more than 220 million Nigerians,” he said.

The NCC vice chair revealed that the attention of the Minister of Communications, Innovation and Digital Economy, Bosun Tijani, has been drawn to the issue and stressed that such a move would not only benefit the Nigerian people but also promote further investment and growth in the telecommunications industry, ultimately contributing to the nation’s development.

Danbatta said, “So we’re delighted with the suspension. But we have drawn the attention of the Minister to exempt the sector from this duty ultimately.”

He also spoke on the progress of the NCC in achieving broadband penetration targets in line with the Nigeria National Broadband Plan 2020 to 2025.

Currently, at 47.2 per cent, the NCC is striving to reach the 50 per cent milestone before the end of the year.

Danbatta said, “We’re at 47.2 per cent. There is still work to be done in achieving our goals. I want to assure you that we are on course to achieve 50 per cent penetration before the year runs out.”

The NCC vice chair, highlighted the importance of broadband infrastructure in the digital economy, emphasising the need for ubiquitous broadband access to ensure inclusiveness and address existing barriers, particularly in rural and underserved areas.

He said this aligns with the International Telecommunication Union’s vision plan of 2013-28, aiming to provide ICT services to everyone, regardless of their location or circumstances.

Danbatta said, “In the context of the digital economy, about eight key points come into play, with four of them revolving around providing infrastructure to achieve the objectives.”

He noted, “It is vital to stress that broadband be accessible to everyone, regardless of their location or circumstances. To achieve this, we must address the existing barriers.

“This leads us to the concept of digital demand where urban areas have access to these services, while rural areas, especially those that are unserved and underserved, still lack access.”