Telecom Consumers Drag Nigerian Government to Court Over Plans to Increase Tax on Telecom Services

Telecommunications consumers in Nigeria under the aegis of the National Association of Telecoms Subscribers (NATCOMS) have taken the Federal Government to court over a plan to impose a five percent excise duty on telecom services.

Displeased with the federal government’s proposed tax increase on telecom services, the National President of NATCOMS Adeolu Ogunbanjo while speaking to the press, stated that the plan to increase taxation in telecom services is unfair, noting that there are too many taxes already.

In his words, “There are too many taxes on telecom service. Putting too many taxes on it is not fair. When you buy airtime, you pay VAT. Why are we still paying VAT for the services.”

A part of the suit read, “A declaration that the imposition and implementation of Value Added Tax on telecommunication services, as taxable services by Section 2 of the VAT ACT as amended, by the 7th – 9th Defendants and the imposition and implementation of Excise Duty on telecommunication services by Section 21(2) of the Excise Act as amended by Section 37 of the Finance ACT, by the 7th – 10th Defendants amount to double taxation on the plaintiff’s members, who are telecommunication services consumers or subscribers in Nigeria, and therefore unconstitutional, illegal, unfair and null and void.”

Meanwhile, Nigeria’s Minister of Finance Budget and National Planning, Zainab Ahmed, disclosed that the tax was necessitated to help boost the government’s revenue.

Reports reveal that the imposition of the tax is a continuation of the federal government’s aggressive move to generate more revenue through tax to finance the 2023 national budget.

It is interesting to note that the federal government had mooted such an idea last year, but suspended it over citizens’ outcry, only for it to resurface in the Finance Bill currently before the National Assembly(NASS) for passage into an Act. 

It would be recalled that in 2022, a report by SB Morgen, titled “Inside Nigeria’s Subnational Fiscal Crisis, “revealed that the telecommunications industry appears to suffer disproportionately from the problems of over-taxation in Nigeria.

The report disclosed that there are over 40 different taxes and levies meted out on the service providers, especially, mobile network operators (MNOs) rendering telecoms services in Nigeria.

It further revealed that the aggressive taxation of the telecom sector is negatively impacting service quality, which has suffered a series of degradation as Nigerians continue to suffer the consequences.

Meanwhile, Nigeria’s Minister of Communications and Digital Economy, Prof. Isa Pantami, faulted the plan of the government to implement a five percent tax increase on the telecoms sector, noting that such a plan is detrimental to the growth of telecoms in Nigeria.