The Fiscal Policy Partner and Africa Tax Leader at PwC, Mr Taiwo Oyedele has warned that the continuous introduction of new taxes without considering the poor may create a social problem for the Nigerian government. Speaking against the backdrop of the recently announced 5% excise duty on telecommunications services, Oyedele said the tax system in Nigeria lacks intentionality as it creates no room for the protection of the poor and vulnerable.
According to him, an additional 5% tax on telecoms services will bring the total consumption tax on data and voice calls to 12.5%, when VAT is added. This, he said, will add extra burden on poor Nigerians who use telecommunications services, which have become essential needs for all.
Emphasising the importance of call and data services to every Nigerian, Oyedele noted that if Maslow’s Hierarchy of Needs theory were to be developed today, telecom airtime and data could have been properly classified along with food and shelter as physiological needs hence the need to ensure that government is not excessively taxing basic needs.
Nigeria’s Minister of Finance had last week announced that telecommunications subscribers would soon be paying 5% tax on calls, SMS and data services.
In a development that showed the government contradicting itself, the Minister of Communication and Digital Economy, Prof. Isa Pantami, on Monday described the tax as unfair, saying he was not consulted before it was imposed. He vowed to explore every legitimate means to ensure the tax is stopped.
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