Telecoms, Excise Duties And Avoidable Controversies

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 Communications and Digital Economy Minister, Dr. Isa Pantami, faced defeat as his efforts to overturn the five percent excise duties on telecommunications services proved unsuccessful. Despite his spirited advocacy, Pantami’s approach was deemed overly grandstanding, ultimately leading to his inability to reverse the excise duties imposed by the Finance Act 2020.

The Finance Act 2020, which included the implementation of excise duties, mandated the Nigerian Customs Services (NCS) to collect these charges. However, Pantami believed that his connections to the Presidency would enable him to overrule the Act. Expressing his displeasure, the Minister claimed he had not been consulted before the decision was made and vowed to resist the excise duties until the end.

Seizing the opportunity, Pantami received Presidential permission to establish a committee to review the excise duty position. Curiously, he appointed himself as the committee’s chairman, setting off a series of concerns regarding conflicts of interest. Critics argued that his position as both judge and advocate compromised the credibility of any judgment rendered by the contrived committee.

Even the Nigerian Communications Commission (NCC), the regulatory authority for the industry, was left out of the process, as Pantami single-handedly pursued his agenda. Despite his efforts, the Minister managed only to secure a temporary suspension of the excise duties. However, he failed to acknowledge the legal reality that only the Parliament, not the President, had the authority to overrule the Finance Act 2020.

In a recent announcement by Finance, Budget, and National Planning Minister, Hajia Zainab Ahmed, it was declared that the collection of excise duties on telecommunication services would resume on June 1, 2023. Pantami’s ambitious pursuit to exert influence unilaterally within the sector suffered yet another setback.

Pantami’s claim in March 2023 that the telecom sector had been exempted from excise duties was met with contradiction. In a circular dated April 20, 2023, signed by Finance Minister Ahmed, it was explicitly stated that the excise duty rate on telecommunications services remained as previously approved by the President and published in the Official Gazette No. 88, Vol. 109 on May 11, 2022.

While Pantami may have had good intentions, his approach of obtaining the answer before the question arose seemed to have ignited the controversy. The limitations of the President’s authority to override the National Assembly were brought into sharp focus.

The consequences of Pantami’s grandstanding will be felt by telecommunications subscribers and operators, who now face the burden of an additional 5% excise duty on top of the existing 7.5% Value Added Tax (VAT).

Analysts have criticized Pantami’s lack of a diplomatic approach and predict a negative impact resulting from his failed endeavor. With high inflation rates and the government’s implementation of increased excise taxes on alcoholic beverages, tobacco, wines, and spirits, consumers find themselves grappling with additional financial burdens.

As Dr. Isa Pantami’s tenure comes to an end on May 29, 2023, the consequences of his mismanaged efforts will remain for others to contend with. The controversy surrounding the telecommunications excise duties serves as a stark reminder of the importance of collaborative decision-making, adherence to established laws, and the avoidance of unchecked grandstanding.

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