FGN Exempts Digital Economy Sector From Paying 5% Excise Duty Tax

Maryam Aminu

The President of the Federal Republic of Nigeria, His Excellency Major General Muhammadu Buhari has approved the exemption of the digital economy sector from 5% excise duty that was earlier proposed by the finance sector in 2022.

The Honourable Minister of Communications and Digital Economy Dr Isa Ali Ibrahim Pantami disclosed this to journalists on Tuesday 21st March, 2023 at Abuja after receiving the report submitted by the Presidential Review Committee on Excise Duty In The Digital Economy Sector.

Pantami said Buhari had on 6th of March approved the exemption of the digital economy sector from the 5% excise duty because it would harm Nigerians.

He said 41 categories of taxes, levies, and charges are already in the digital economy sector; hence there is no justification for an additional excise.

“There is no need for excise duty in the telecommunications sector because the industry is already heavily taxed up to 41 taxes.

“Instead of putting more burden on one sector that is contributing to the GDP, why not engage other sectors that are not performing well”, he asked.

Pantami added that in the past 3 years, the sector had been contributing hugely to Nigeria’s economy and solicited that no burden should be put in the sector as more tax burden will destroy the industry.

He further reminded that the digital economy sector is the only sector where the prices of services has reduced.

“We increased revenue generated by 594% which is unprecedented in the history of Nigeria

The Minister noted that many Micro, Small and Medium Enterprises, MSMEs depend on the sector to function; if the tax is increased, the negative impact will be extended to other sectors that are leveraging on the telecommunications services

Speaking also, The Executive Vice-Chairman, Nigerian Communications Commission, (NCC), Umar Danbatta, expressed the commission’s commitment to improving the telecom industry.

He said the reduction of data price had been the main target of the commission, adding that the average 1 gigabit of data that used to be 1200 and dropped to 350 in 2019 had dropped from N350 to N335.

Danbatta advised Nigerians to call the toll free line (622), to report mobile network operators charging exorbitant prices for data.