Dr. Isa Pantami - Afrikan Heroes

Nigerian Government Ready to Impose 5% Excise Duty On Data, Calls

August 12, 2022

Minister of Communications and Digital Economy, Dr. Isa Pantami

The Nigerian government has unveiled its plans to impose a 5% excise duty on data and calls. This is coming after its Minister of Communications and Digital Economy, Dr. Isa Pantami and stakeholders in the telecoms sector of the economy, protested the planned introduction of tax arguing that it would be detrimental to the country’s quest to grow its digital economy and creatives.

The country’s Minister of Finance, Budget and National Planning who disclosed this on Thursday said the Government would begin the implementation of a five per cent excise duty tax on all voice calls, SMS and data services, in addition to the existing 7.5 per cent Value Added Tax (VAT), paid for goods and services across all sectors of the economy.

She made the disclosure during a stakeholders’ meeting, organised by the Nigerian Communications Commission (NCC), and the telecoms industry regulator.

At that meeting, Mrs Zainab Ahmed, Minister of Finance, Budget and National Planning, who was represented by the Assistant Director, Tax Policy, Federal Ministry of Finance, Budget and National Planning, Musa Umar, noted: “The five per cent excise duty has been in the Finance Act 2020, but has never been implemented.

“Henceforth, the five per cent excise duty will be collected by telecom operators and payment made to the federal government on a monthly basis, on or before 21st of every month.”

Yunusa Tanko Abdullahi, Special Adviser, Media & Communications to the Minister said in a press statement that “against the comments by Dr Isa Ali Pantami, Minister of Communication and Digital Economy, concerning the five per cent excise duty hike on telecoms services, it is worth noting that there was a circular stating the planned hike which was addressed to the communication minister and other relevant ministries and agencies of government.

“The circular Referenced No. F. 17417/VI/286 dated 1st March 2022, and titled “Approval for Implementation of the 2022 Fiscal Policy Measures and Tariff Amendments” was addressed to different Ministers, including the Minister, Communications and Digital Economy and other heads of government agencies.

“The circular was addressed to the Secretary to the Government of the Federation, Attorney-General of the Federation, Ministers of Industry, Trade and Investment; Agriculture and Rural Development, and; Mines and Steel and Development. Others are Ministers of Health, Aviation, Information And Culture, Budget And National Planning.

“Other heads of agencies copied in the circular are Accountant-General of the Federation, Comptroller-General of Customs, Governor of the Central Bank of Nigeria, Executive Chairman of the Federal Inland Revenue Service and the Director-General of the Raw Materials Research and Development Council.

“Others are the Executive Secretary of Nigerian Export Promotion Council (NEPC) and the Executive Secretary of the Nigerian Investment Promotion Commission”.

According to Yunusa, part of the circular reads: “This is to convey that his Excellency Mr President has approved Supplementary Protection Measures (SPM) for implementation of ECOWAS Common External Tariff (CET) 2022-2026 and excise duties on non-alcoholic beverage, cigarettes and Tobacco products as well as telecommunication services with effects from 1st April 2022″.

The circular signed by Mrs Ahmed reads: “A grace of ninety (90) days commencing from the date of implementation of this circular i.e April 1, 2022, shall be granted to all importers who had opened Form M and must have entered into irrevocable trade agreement before the coming into effect of this circular to process and clear these goods at the prevailing duty rates.

“However new import transactions entered from the 1st of April 2022 will be subjected to the new import duty regime,” she said.

Recall that the Finance Act, 2020 introduced ‘Telecommunication Services’ provided in Nigeria to be liable to excise duty under Section 21 (2) of the Customs and excise tariff etc. (Consolidation) Act, CAP. C49, LFN 2004.

It, therefore, means that all stakeholders have by that singular provision been aware of the Act.

The excise duty on telecommunication services provided in Nigeria introduced through the Finance Act, 2020 with statutory enactment on 1st January, 2021 is yet to be implemented to date.

This is considering the need to ensure a reasonable transition period before the implementation of the new tax, as well as providing clarity to all stakeholders on implementation modalities.

He noted that as a matter of emphasis, Mrs Ahmed had vide Circular dated 1st March, 2022 informed the Nigeria Customs Service (NCS) and other heads of government ministries, departments and agencies (MDAs), including the Federal Ministry of Communication & Digital Economy about Mr President’s approval of the implementation of the five percent excise duty on telecommunication services with effect from 1st June, 2022.

The circular provided a 90-day moratorium with effect from 1st March, 2022 before the implementation of the excise tax and currently, the excise tax is yet to be implemented.

“An issue as serious as the excise tariff cannot be taken single-handedly, as all stakeholders and agencies have been involved including Manufacturers Association of Nigeria (MAN) and Association of Telecom Operators of Nigeria (ALTON), who wrote to the Ministry to be involved in the modalities for implementation of the excise duty.

“Also recall that recently, Dr Pantami rejected the planned implementation of five per cent excise duty in the Nigerian telecoms sector.

“He expressed his disapproval of the policy at a telecom forum in Lagos, organised by the Nigeria Office for Developing the Indigenous Telecoms Sector (NODITS), an agency domiciled in the Nigeria Communications Commission (NCC).

“He said that he would explore every legitimate means to stop the planned five per cent excise duty tax on telecom consumers, faulting the timing and process of imposing the tax on the telecom industry, insisting that part of the responsibility of a responsive government was not to increase the challenges citizens were facing”, Yunusa further stated.

“I have not been contacted officially. If we are, we surely will state our case. The sector that contributes to the economy should be encouraged. You introduce excise duty to discourage luxury goods like alcohol, but broadband in the telecom sector is a necessity,” he quoted Pantami as saying.

Continuing, Mrs Ahmed said “In view of the above position of Dr Pantami, there could be the question whether he was absented in the whole processes that resulted in the Finance Act, which is a product of both the National Assembly and Federal Executive Council (FEC).

“Suffice this to say that before the Act, the Finance Bill would have been through the FEC of which Dr Pantami is a member and the National Assembly. In other words, he was involved in the making of the Finance Act which spells the said excise tariff hike policy. Therefore, he could not obviously have had a point in his dissenting views even as the National Assembly could not have contradicted itself on this matter, because the parliament had passed the Finance Bill before President Muhammadu Buhari signed it into law”.

She noted that although Nigeria is celebrated as the largest economy in Africa, translating this wealth into revenues remains a challenge.

“Considering this in line with the provision of the revised National Tax Policy which provides the framework for a sustainable tax system that would ensure reliable sources of revenue to government and support economic development.

“Subsequently, in line with the Finance Act, the federal government introduced “Telecommunication Services” provided in Nigeria to be liable to excise duty under Section 21 (2) of the Customs and Excise Tariff etc. (Consolidation) Act, CAP. C49, LFN 2004.”

Mrs Ahmed said Nigeria is one of the largest telecommunication markets in Africa, and available report from the NCC shows four categories of operators, i.e. mobile (GSM), fixed telephony operators (fixed/ fixed wireless), internet service providers (ISPS) and others (operators other than mobile & fixed telephony, ISPs).

Subscriber number, she noted, continues to grow substantially, having increased from about 180 million subscribers in 2019 to over 200 million active subscriptions in 2020.

This, Mrs Ahmed reiterated represents an increase of over nearly 11 per cent in total subscriptions, explaining that moreover, many countries in sub-Saharan Africa such as Tanzania, Uganda, Malawi, Kenya, Rwanda, Ghana and Burundi currently impose excise duty on telecommunication services ranging between five per cent to 20 per cent.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Nigerian Startup Bill Gets Government Approval, Heads To Parliament

December 17, 2021

The Nigeria Startup Bill has been passed by the Nigerian Federal Executive Council (FEC) and will be referred to the National Assembly for consideration. Dr. Isa Pantami, Minister of Communication and Digital Economy, said this while briefing State House media at the end of President Muhammadu Buhari’s virtual council meeting at the Presidential Villa’s Council Chamber in Abuja.

“The Federal Executive Council has approved the Nigeria Startup Bill and has also directed my humble self, the Minister of Communications and Digital Economy and also the Attorney General of the Federation and Minister of Justice to ensure that we immediately liaise with and transmit them to the National Assembly to begin their legislative process of converting it into a law,” Pantami said.

The 11-chapter law, according to Dr. Pantami, replaces the National Investment and Startup Policy.

With this development, he said, his Ministry will work closely with the Attorney General of the Federation, AGF, and Minister of Justice, Abubakar Malami, to communicate with the National Assembly so that the bill may be converted into law.

Dr. Isa Pantami, Minister of Communication and Digital Economy, — Dr. Isa Pantami, Minister of Communication and Digital Economy

The Minister, who stated that if passed into law, the new bill will create an enabling environment for Nigerian startups, also stated that the bill includes provisions that allow for easy access to grants, such as a Startup Investment Safe Fund for young innovators who can apply for government sponsorship of their ideas.

Pantami also revealed that national centers will be established across the country where inventors will be able to incubate their ideas with full intellectual property protection.

The law, according to the minister, would create the National Council for Digital Innovation and Entrepreneurship, which will be in charge of coordinating with various regulatory organizations to ensure that Startups receive assistance and incentives.

“And by this, the Nigeria Startup Bill has replaced our National Digital Innovation, Entrepreneurship and Startup Policy. This bill has 11 chapters and all of them have been crafted in order to provide the enabling environment for our startups to be very successful. Firstly, the bill will establish the National Council for Digital Innovation and Entrepreneurship.

“This council is going to be chaired by his Excellency, Mr. President himself, and part of the council. He will be supported also by the Vice President. And I will also support both of them and many relevant ministers and government parastatals are part of the council.

“Furthermore, there is also the operational structure of the council in which all the relevant institutions that have a role to play in providing the enabling environment for our startups to thrive are part and parcel of this operational structure.

“Furthermore, this addresses the startup labeling process where a startup is going to be labeled. And after that, there is eligibility for grant. If a startup is looking for government grant, there is a process to follow, which is very easy and at the end, government will be able to provide the grant.

“And also, there is a process of issuing the certificate of labeling for the startup.

“In addition to that, the bill also will establish Startup Investment Safe Fund, where there is going to be a dedicated fund to be provided by the federal government for our young innovators all over the country to apply for the startup investment…safe fund in order to begin their own company if they need that.

“In addition, there are also tax and fiscal incentives where government will provide tax holidays, where government will support our startups to even liaise with international or multi tech giants globally. So government will provide tax holidays and other incentives where necessary.

“Also, there is a chapter dedicated to regulators where they have been mandated to come up with initiatives of promoting developmental regulation because today many investors and young innovators consider regulators to be doing nothing but restricting the development of their startups.

“But this bill comes up with an initiative to provide what is called developmental regulation, where regulators must make the regulation very flexible to support our innovators all over the country.

“And also in the bill, there is a plan to establish national parks all over the country, national hubs, where innovators will go and incubate their ideas.

“There is also a provision for data protection where your data is going to be protected. And also, there is provision for intellectual property rights. So, any intellectual property you have will must be protected by government.

“So, there are many provisions where even if a startup founder doesn’t have one kobo, government will support him through seed fund.

“Government will provide an avenue or an environment for him to come and work on his startup. And also, government is willing to support him when he gets any international partnership.

“This startup bill is an outcome of a very long process between the office of the Chief Of Staff, Mr. President and the federal ministry of communications and digital economy, where we engaged stakeholders in each and every zone of the Federation.

“We brought together young innovators. We listened to their complaints to government and we articulated their complaints in this bill. So this bill has adopted what is called organic approach to legislation, where we begin with a bottom-up approach.

“So the idea started from the grassroot up to the level of the federal executive council, in which all the observations of our young innovators have been accommodated in this startup and they are the owners of it. So this is the summary, the first memo has been approved by the federal executive council.

Startup Bill Nigeria

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer