Business
FG sets to implement 5% excise duty on telecom services
Nigerians will soon start paying 12.5 per cent tax on telecommunications services as the Federal Government plans to implement five per cent inclusive excise duty on telecommunications services in Nigeria.
The Minister of Finance Budget and National Planning, Mrs Zainab Ahmed, said this at a stakeholders’ forum on implementation of excise duty on telecommunications services in Nigeria on Thursday in Abuja.
The event was organised by the Nigerian Communications Commission (NCC)
The News Agency of Nigeria (NAN) reports that the five per cent will be added to the already existing 7.5 per cent Value Added Tax (VAT) on telecommunications services.
Zainab, who was represented by the Assistant Chief Officer of the Ministry, Mr Frank Oshanipin, said the five per cent excise duty had been in the finance Act: 2020 but was not implemented.
She said the delay on its implementation was as a result of government engagement with stakeholders.
“Payments are to be made on monthly basis, on or before 21st of every month.
“The duty rate was not captured in the Act because it is the responsibility of the President to fix rate on excise duties and he has fixed five per cent for telecommunication services which include GSM.
“It is public knowledge that our revenue cannot run our financial obligations, so we are to shift our attention to non oil revenue.
“The responsibility of generating revenue to run government lies with us all,” she said.
Mr Gbenga Adebayo, Chairman, Association of Licensed Telecom Owners of Nigeria (ALTON) said the burden would be on telecommunications consumers.
“It means that subscribers will now pay 12.5 per cent tax on telecom services, we will not be able to subsidise the five per cent excise duty on telecom services.
“This is as a result of the 39 multiple taxes we already paying coupled with the epileptic power situation as we spend so much on diesel,” he said.
Meanwhile, the President of the Association of Telecommunications Companies of Nigeria, (ATCON), Dr Ikechukwu Nnamani, said the five per cent excise duty on telecom services did not conform with present realities.
Nnamani was represented by the Executive Secretary, Mr Ajibola Alude.
He said that the state of the industry was bleeding and suggested that the five per cent excise duty be stepped down as it could lead to job losses.
“t is not well intended, because the industry is not doing well currently,” he said.
The Controller General of the Nigerian Customs (NCS), retired Col. Hameed Ali, who was represented by the Assistant Controller, Mrs Lami Wushishi, said all active telecom service providers would pay the five per cent excise duty.
Executive Secretary ALTON, Mr Gbolahan Awonuga, said the five per cent excise duty was not healthy for the industry.
Awonuga said that the telecom service providers were already paying two per cent of their annual revenue to the NCC.
“We pay two per cent excise duty to NCC from our revenue, 7.5 per cent VAT and other 39 taxes.
“We are going to pass it to the subscribers because we cannot subsidise it,” he said.
The Executive Vice Chairman of the NCC,
Prof. Umar Danbatta, in his remarks, said the excise Duty was to have been implemented as part of the 2022 fiscal policy measures.
Danbatta said the industry had considered the earlier scheduled commencement date of June 1, inadequate and duly took this up with the Federal Government.
He said the NCC had engaged with the federal ministry of finance, the Nigerian customs service and consultants from the World Bank to get needed clarifications.
“These engagements enabled us to better understand the objectives and proposed implementation mechanisms of the excise duty.
“We consider it imperative that these implementing agencies should also meet directly with telecoms industry stakeholders to address areas of concern.
“As the regulator of the telecoms industry, we are responsible for ensuring that industry stakeholders understand their fiscal and other obligations, so that they can maintain full compliance with government policy’,” he said.
He added that the excise duty covered both pre-paid and post-paid telecommunications services. (NAN)
The Nigerian stock market ended Wednesday on a bullish note, recording a significant gain of N364 billion for investors, despite concerns over corporate governance as 30 companies were axed from the Nigerian Exchange Limited (NGX).
The market’s positive performance was largely driven by the release of full-year 2024 financial results, boosting investor confidence.
The market capitalisation, which opened at N64.156 trillion, increased by 0.57% to close at N64.520 trillion.
READ MORE: EFCC, NGX RegCo Strengthen Partnership On Market Integrity
Similarly, the All-Share Index (ASI) rose by 591 points, or 0.57%, to settle at 104,549.74 from the previous 103,958.75. This pushed the Year-To-Date (YTD) return to 1.58%.
Despite the market’s overall bullish sentiment, market breadth remained negative, with 38 losers outweighing 27 gainers.
Among the top gainers, Aradel Holdings led the chart with a 10% increase to close at N594, followed by Chellarams Plc (9.98%), Stanbic IBTC (9.92%), UPL (9.64%), and Daar Communications (9.09%).
On the flip side, McNichols and Caverton led the losers’ chart, both dropping 10% to close at N1.44 and N2.07 per share, respectively.
Other notable decliners included Thomas Wyatt (-9.8%), Veritas Kapital (-9.79%), and Consolidated Hallmark Plc (-9%).
Market activity remained robust, with the total value of traded stocks rising by 9.99%. Investors exchanged 421.62 million shares worth N15 billion across 16,256 deals, compared to 542.23 million shares valued at N13.636 billion in the previous session.
Universal Insurance dominated the volume chart with 33.6 million shares, while Aradel Holdings led in transaction value, recording N6.3 billion in trades.
Amid the market rally, the NGX took a decisive step in enhancing corporate governance by delisting 30 companies over compliance failures.
The NGX Regulation Limited (NGX RegCo), the independent regulation subsidiary of Nigerian Exchange Group (NGX), and the Economic and Financial Crimes Commission (EFCC) have called for enhanced partnership to enhance market surveillance and combat financial crimes in Nigeria’s increasingly digitalized capital market.
This strategic initiative was discussed during a high-level meeting between NGX RegCo’s Chief Executive Officer, Olufemi Shobanjo, and EFCC’s Executive Chairman, Ola Olukoyede, at the Commission’s Abuja headquarters on Tuesday, January 28, 2025.
During the meeting, Shobanjo highlighted the critical need to adapt regulatory frameworks to address sophisticated digital financial crimes emerging in today’s evolving market landscape. “The digitalization of our markets has brought new challenges, necessitating a more robust collaborative approach,” he stated. “While our 2013 MoU established initial cooperation parameters, the substantial market growth in 2024 demands an enhanced partnership framework. As a frontline regulator, we recognize the EFCC’s crucial role in providing enforcement support and specialized expertise to combat market abuse and protect investor interests.”
ALSO READ: Dangote Imports 12m Barrels Of Crude From United States
Shobanjo emphasized NGX RegCo’s dedication to maintaining market integrity and expressed confidence that reinforced collaboration with the EFCC would strengthen investor protection mechanisms.
Responding, Olukoyede commended the desire to strengthen the existing relationship between the two agencies and assured that the Commission was ready and willing to collaborate.
“I know you are also concerned with regulatory compliance because the issue of compliance is a key issue. It is part of our mandate to enforce compliance. Under my administration, we have strengthened our bond with different regulatory bodies. Let’s see how we can have a desk where we can work better and attend to you. I have a special interest in the capital market in respect of the abuse of assets and trades. We will try to review the MoU, make our observations in line with the relevant laws and regulations, and communicate our views to you. We pledge our commitment to this”, he said.
The strategic dialogue highlighted both organizations’ shared commitment to fostering a secure, transparent, and globally competitive Nigerian capital market that instils investor confidence and promotes sustainable economic growth.
In the bid to boost local refining of petroleum products, the Dangote Petroleum Refinery has placed orders for up to 12 million barrels of crude oil from the United States.
Biztellers gathered that the refinery resorted to crude importation because local supply challenges was threatening the new $20bn refinery’s push to reach full refining capacity.
Recall that the refinery plans to reach its 650,000 barrels per day capacity in June this year.
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Reliable sources at the Dangote Refinery maintained that low local crude supply from the Nigerian National Petroleum Company Limited (NNPC Ltd) had become a challenge to this plan to ramp up daily production.
The 12 million barrels of crude were already on the way from the United States and expected to land in Nigeria next month, according to the African Report.
“About 12 million barrels of crude have departed the US and should arrive in Nigeria by February,” an insider source told The Africa Report.
Dangote Petroleum Refinery is said to be importing more crude oil as supply from the NNPC becomes insufficient for fuel production at the $20bn Lekki-based facility.
Officials at the plant said the facility has ramped up production to about 500,000 barrels per day, with the target of hitting the 650,000bpd mark by June this year.
The NNPC Ltd is reportedly struggling to supply 350,000bpd to the Dangote refinery from the 450,000bpd crude meant for Nigeria’s local consumption.
With its current production capacity of 500,000bpd, officials said there is a need to look beyond the shores of Nigeria for the feedstock.
Recall that in July 2024, President Tinubu ordered the NNPC Ltd to sell crude oil to local refineries in naira.
According to the crude oil production forecast of producing oil companies and the refining requirement of functional refineries in Nigeria signed by the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, the Dangote refinery would require 550,000 barrels of a blend of Nigerian crude oil daily, 17.05 million barrels monthly, and 99.55 million barrels between January and June 2025.
The Dangote Refinery is already building eight more tanks to store imported crude. The facility is planning to stockpile imported crude oil because local supplies have become unreliable.
Officials of the refinery were quoted as saying that low crude supply from the NNPC Ltd “is driving import dependence.”
The building of eight additional tanks will see crude storage capacity at the refinery jump by 41.67 per cent to 3.4 billion litres.
“Importing crude from other countries instead of buying locally means that our crude stockpiles will have to be higher,” the Vice President in charge of the oil and gas business at Dangote Industries, Devakumar Edwin, said.
In May 2024, the refinery reportedly issued a term tender for the purchase of two million barrels of West Texas Intermediate Midland crude monthly for 12 months starting in July last year, amounting to 24 million barrels of crude in one year.
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