Nigeria exempts digital economy from 5% excise duty
March 22, 2023186 views0 comments
By Onome Amuge
The federal government has excluded the digital economy sector from the five per cent excise duty tax proposed earlier in the 2022 Finance Act,initially approved to be paid by all sectors of the economy.
Isa Pantami, the minister of communications and digital economy, made the announcement after receiving the report submitted by the presidential review committee (PRC) on excise duty in the digital economy sector.
Addressing newsmen in Abuja, the minister said:“I am glad to say and announce to Nigerians that his Excellency Mohammadu Buhari, the president of the Federal Republic of Nigeria has approved the exemption of the digital economy sector from the five per cent excise duty to be paid. And this is because of the argument presented to him that the implementation will increase the suffering of citizens.
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And he strongly insisted that other sectors in our country are to be challenged to improve revenue generation for the government, not the sector that has already increased revenue generation by 594 per cent within only three years which is unprecedented in the history of Nigeria.”
According to Pantami, the telecom sector was already over-burdened by taxes and levies, as 41 categories of taxes, levies and charges are already in the digital economy sector, leaving no justification for an additional excise.
The minister also pointed out the sector has been contributing hugely to Nigeria’s economy and an additional tax is a burden that could destroy the industry.
Pantami further justified the president’s decision to exempt the digital economy sector from the five per cent tariff, noting that it is the only sector where the prices of services have been reduced.
The minister also stressed that increased taxation would take a toll on many Micro, small and medium enterprises (MSMEs) and Small and Medium Enterprises (SMEs) dependent on the sector for survival.
To this end, he disclosed that President Muhammadu Buhari, had on March 6,approved the exemption of the digital economy sector on the five per cent excise duty because it would harm the Nigeria citizens.
Umar Danbatta, the executive vice chairman of the Nigerian Communications Commission (NCC), said the outcome of the presidential review committee on excise duty is one of the major steps in sustaining growth in the nation’s telecom sector.
Gbenga Adebayo, chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), said the excise tax exemption is a major achievement championed by the minister of communications and digital economy for the sector.
Adebayo also commended the government for listening and acting on the plights of the sectors of the economy.