Broadcasting
How desirable is 5% Excise Duty on Telecom Services?
By Ibrahim Dan Halilu
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has thrown Nigeria into another controversy amidst plans to launch the 5G network, which is expected to transform every sector and sphere of life of the citizenry.
Coming at a time when Nigeria warming up to launch the largest high speed mobile network technology (5G) in Africa, the 5% excise duty on telecom services being implemented by the Federal Ministry of Finance and the Nigeria Customs Service, is not only a negation of the laudable gains of the Buhari administration in the telecom sector but another incontrovertible proof of the administration’s poor policy coordination.
The expectation of most Nigerians is that the Finance Minister and the Controller General of the Nigeria Customs Service who are the prime advocates of the 5% excise duty will engage with the Ministry of Communications and Digital Economy under whose purview the telecom sector presides, and the Nigerian Communications Commission (NCC) which is the telecom sector regulator, to create a synergy before rolling out the new tax regime.
It is no brainer to understand the imperative of engaging with these two government institutions whose role is central to all that the administration has achieved in that sector.
The NCC has over the years implemented various initiatives and programmes that have stabilized the telecom sector and created a very healthy environment for the industry to thrive and offer quality and affordable service to Nigerians.
The commission’s declaration of 2016 as the Year of the Telecom Consumers has placed premium on the consumer as king who should be treated with respect and offered value for money.
Conversely for the mobile network operators who enjoyed massive support of the Commission disputes resolution, protection of critical telecom infrastructures, and restoration of operational facilities that enhance better performance of the industry.
The Commission has played a very strategic role in resisting arbitrary hike in tariffs and other charges for telecom services which can impose additional burden on the consumers. Instead, the NCC envisions a new tariff regime that has not only reduced the cost of data by more than 100% but further increased access to telecom services in Nigeria.
Its robust National Broadband Policy 2020-2025 is aimed at achieving a new landmark in telecom operations in Nigeria as it rolls out the 5G technology that will change the way of doing almost everything.
Similarly, the Ministry of Communications and Digital Economy through its indefatigable minister, Prof. Isa Ali Pantami has launched Nigeria on the world map of countries that are transiting from analogue to digital economy with the unveiling of a robust policy on 5G Network and Digital Economy.
These are commendable efforts that should be complimented by the Federal Ministry of Finance and Nigeria Customs Service (NCS) through advocacy for a downward review or complete removal of some of the tariffs imposed on the MNOs and other service providers.
The presidential inauguration of a 27-person committee charged with the teak of exploring ways of improving Nigeria’s ranking on the Ease of Doing Business, should have been followed by an aggressive drive of the Federal Ministry of Finance to streamline some of the regulatory measures that hinder the effective performance of the industry such as multiple taxation, and promote policies that will remove barriers to consumer adoption of the new technology.
It is on this note that one wishes to appeal to the Minister of Finance to exercise the power conferred on her by the Finance Act 2020 with caution and empathy to the Nigerian consumers who are already overburdened by new series of taxes introduced by the Buhari Administration.
The Minster needs to find equilibrium between government’s desires to raise more funds and citizen’s expectations for better welfare as the destabilizing effects of the new tax regime outweigh its monetary benefits both to the economy and the citizens.
Firstly, the policy will reverse the gains recorded by the NCC in reducing the cost of telecom services to the consumer and efficient service by the Mobile Network operators (MNOs) who have to contend with multiple taxations and increased operation costs.
Secondly, the new policy may further have adverse effect on the flow of both foreign and local investment in the broadband infrastructure that is needed to scale up the deployment of 5G network to other cities across the country. The MNOs are already groaning under an indiscriminate multiple taxation policy that make is harming their business.
The greatest damage the new tariff will do to Nigeria’s telecom sector is derailing the rollout and total adoption of the 5G network that is being test run by the major telecom service network, the MTN whose competitor, Mafab has already announced an extension of the 5G launch to end of the year due to unforeseen challenges.
The Federal Government’s policy on 5G Spectrum for Digital Economy driven by the Ministry of Communication and Digital Economy may suffer a setback under the new harsh tax regime that targets the telecom sector as a major revenue earner for government.
The imposition of the 5% excise duty will be an additional burden on small businesses and individuals who wish to take advantage of the benefits and opportunities offered by the 5G network to expand and improve their businesses as they may face a new tariff regime.
Another possible consequence of the new tax regime is retarding the progress made in launching Nigeria into the open governance platform that promotes transparency and accountability, while enhancing citizens’ participation in governance as any increase in tariff will lead to low patronage of the telecom services.
It is my candid view therefore that the introduction of 5% excise duty on telecom services is both untimely and undesirable for Nigeria whose majority citizens are living below poverty margin, and have no visible source of income.
The Federal Ministry of Finance and the Nigeria Customs Service should dissipate more energy on initiating people-centred policies that will support the NCC in performing its regulatory functions instead of frustrating the laudable efforts of the commission to promote affordable and efficient telecom services in Nigeria.
The duo should regard themselves as a part of the same government that enunciated the policy of promoting digital economy through universal access to telecom services for Nigerians instead of a separate entity that competes for space or attention.
In her search for new avenues to improve government revenue, the Finance Minister should look beyond imposing excise duty on telecom services, and engage with the public and other stake holders to explore other options that are richly available.
The government can tilt the scale towards diversifying its revenue generation to imports for luxury items, luxury life-styles, and reducing the cost of governance at different levels. There are many wasteful spending that can be scaled down to save money for government to meet its financial obligations which is the main thrust of the Minster’s argument.
These include the purchase of exotic vehicles for public office holders, foreign travels, high duty allowances, and foreign trainings for public officials. Others are blocking the conduit pipes and confronting corruption head on.
These and many others will spare a huge sum that can be channeled to more productive projects that will impact on the lives of the people.
The rush to impose new tax regime on consumers of telecom services will be self-defeating, if at the end of the day the only benefit it accrues to the government is more money to spend instead of better welfare for citizens.
The telecom services are no longer a luxury but necessary tools that Nigerians need to connect with the rest of the word, share their ideas, knowledge, and information for a much better society.
The government should not shut out Nigerians or make it impossible for them to reach out to the rest of the world to market their skills, talents, and products in return for the much needed foreign exchange which is the essence of the digital economy which is the fulcrum of the administration’s |economic policy.
Nigerians deserve efficient and affordable telecom services to conduct their business activities on a global scale, which the controversial 5% excise duty seems to negate. It is a right, not privilege!
Ibrahim Dan Halilu is an Abuja based media consultant and communication expert. He can be reached via email at [email protected] or mobile 08101064449 9SMS only).
Yemisi Bamgbose, executive secretary of the Broadcasting Organisation of Nigeria (BON), has faulted the decision of the Federal Competition and Consumer Protection Commission (FCCPC) to review DStv and GOtv subscriptions.
In a statement on Monday, Bamgbose said the commission had remained silent following the increase in prices of goods and services by big firms and companies — but intends to review prices of the pay-tv.
“I would have given FCCPC a thumb up if they had been intervening on price matters, most especially those that have direct bearing on the livelihood of the masses,” Bamgbose said.
“If the mandate of FCCPC includes price control of goods and services in a free and deregulated economy, where was the organisation when Bakers Association in the country increased the cost of a loaf of bread more than 200% in the last one year.
“I doubt if FCCPC was aware that a sachet of pure water has been increased from five naira to twenty naira the last one year. Is the organisation on vacation?
“Perhaps the organisation is on leave when bottling companies in the country astronomically increased the cost of malt and other soft drinks. I was surprised that FCCPC didn’t call stakeholders meeting to review the new prices.
“Perhaps the cost of a bag of cement has not been increased from four thousand Naira in the last one year. That must be the reason why FCCPC did not deem it fit to invite Dangote, Bua and Lafarge cement manufacturers with relevant stakeholders to discuss the more than 100% increase on a bag of cement.
“Aviation sector, on a daily basis, increases the cost of domestic flights. This also has not attracted the attention of FCCPC.
“In the education sector, I was wondering why FCCPC could not call for the review of the cost being charged by private educational institutions especially those charging in dollars in a country where Naira is the legal tender.”
According to Bamgbose, if other services are allowed to increase their prices, MultiChoice should also have the freedom to determine the price of its products to maintain high-quality service.
She added that the choice of whether or not to subscribe to the service should be up to the consumer.
The secretary said subscription television is not an essential commodity and those who cannot afford the services of MultiChoice or any pay TV can decide not to subscribe.
“Anyway, on the part of broadcasting, I want to assume that FCCPC does not know what goes into the business of broadcasting, perhaps, that could inform the decision of the agency to plan the proposed review of the increase in the price of DSTV and GOTv pay TV channels respectively,” she said.
“There are free to air stations such as NTA, RADIO NIGERIA, AIT, SILVERBIRD CHANNELS, STATE OWNED RADIO AND TV STATIONS, PRIVATE RADIO STATIONS etc where consumers don’t pay to listen to radio or watch television.
“There are subscription channels such as MULTICHOICE, GOtv, TNtv, STARTIMES etc where viewers pay to watch and listen. There are choices.
“During Covid-19 pandemic, stations burnt diesel without adverts or other sources of revenue for more than twelve months in national interest.
“The cost of diesel rose from two hundred naira per litre in 2021 to one thousand seven hundred per litre in 2023/24, and broadcast stations have to transmit for twenty four hours changing from one generator to the other.
“None of the national stations such as Channels TV, Arise, TVC, AIT, Silverbird, and NTA, amongst others, commits less than one hundred million Naira on diesel on monthly basis to keep their mandate of information, education and entertainment.
“It may interest the public to know that many, if not all, of the national radio and television stations in Nigeria have not been able to break-even since 2020 when the nation’s economy was shut down as a result to Covid-19 pandemic.
“Why? Each network station that transmits 24 hours consumes not less than twelve thousand litres of diesel per week. In Nigeria, we want everything free.
“For MultiChoice to provide coverage to the nooks and cranies of the country, it maintains over three hundred sites powered with diesel generating sets in each of the sites.
“The public should also know that these PAYTV companies purchase all these contents that subscribers watch at the comfort of their homes and offices.
“Those who can not afford the services of MultiChoice and indeed any pay TV can decide not to subscribe, afterwards, there are many free to air television channels and content on satellites OVER THE TABLE (OTT) that can be accessed through free to air decoders and wifi.”
Recall that on April 24, Multichoice Nigeria announced an increase in the cost of subscriptions for its DStv and GOtv packages.
The pay-tv firm cited the rise in cost of operations as the rationale behind the price increase.
Competition and Consumer Protection Tribunal (CCPT) sitting in Abuja has restrained Multichoice Nigeria, a -TV operator, from implementing the DStv and GOtv subscription prices hike it announced last week
The interim order was sequel to an ex-parte motion filed before the court by Ejiro Awaritoma, counsel to the applicant, Festus Onifade.
The three-member panel of the Competition and Consumer Protection Tribunal, presided over by Saratu Shafii, issued the order on Monday.
Recall that THE management of Multichoice Nigeria Limited last week announced a fresh hike in the prices of subscriptions for its DStv and GOtv packages.
The fresh prices hike came barely four months after the previous fee adjustment.
According to an email sent to customers, the new prices on its DSTV and GOtv packages would take effect on Wednesday, May 1, 2024.
But Onifade. in a suit marked: CCPT/OP/2/2024, had dragged MultiChoice Nigeria Limited and the Federal Competition and Consumer Protection Commission (FCCPC) before the Competition and Consumer Protection Tribunal
Onifade in the suit filed on April 29 sought “An order of interim injunction of this honourable tribunal restraining the 1st defendant, whether by themselves, her privies, assigns by whatsoever name called from going ahead with impending price increase schedule to take effect from 1st May, 2024, pending the hearing and determination of the motion on notice
“An order restraining the 1st defendant from taking any step(s) that may negatively affect the rights of the claimant and other consumers in respect of the suit pending the hearing and determination of the Motion on Notice.”
In its ruling, the court restrained MultiChoice from implementing the announced prices increment, pending the hearing and determination of the motion on notice filed before it.
The court ruled that “The 1st defendant is hereby restrained from taking any step(s) that may negatively affect the rights of the claimant and other consumers in respect of the suit pending the hearing and determination of the motion on notice.”
The court directed all parties in the suit to appear before it on May 7 at 10am for the hearing and determination of the motion on notice.
The three-member tribunal chaired by Saratu Shafii, delivered the ruling on Monday on an ex-parte motion marked CCPT/OP/2/2024 and filed by Festus Onifade through his lawyer, Ejiro Awaritoma.
Onifade had sued Multi-Choice Nigeria Ltd, and the Federal Competition and Consumer Protection Commission (FCCPC), accusing the former of unjustly increasing subscription fees.
LG Electronics, a global leader in technology and innovation, is delighted to announce the launch of the highly anticipated K-POP Fiesta contest in Nigeria.
This exciting event offers fans a unique platform to showcase their passion for Korean pop music and dance, while providing an opportunity to engage with fellow enthusiasts from all corners of the country.
The contest will be to four major cities in Nigeria, including Lagos, Abuja, Port Harcourt, and Ibadan. The K-POP Fiesta contest aims to bring the electric energy and vibrant culture of K-POP to Nigeria, a country known for its love of music and dance.
The K-POP Contest invites talented individuals and groups to contest in various categories, including singing, dancing, and performance. As part of its commitment to fostering cultural exchange and embracing diversity
“We are excited to bring the K-POP Contest to Nigeria and provide a platform for talented individuals to shine,” said Mr. Hyoungsub Ji, Managing Director at LG Electronics West Africa.
“By taking the contest to multiple cities, we aim to reach a diverse range of participants and celebrate the rich cultural exchange between Korea and Nigeria. Contestant will have the opportunity to win exciting prizes and recognition for their talent”.
“We are thrilled to bring the K-POP Fiesta contest to Nigeria, a country with a rich musical heritage. This event is a testament to LG’s dedication to providing unique and exciting experiences for our customers. We believe that K-POP has the power to unite people from different backgrounds and create a sense of joy and unity.” Mr. Hyoungsub added
The K-POP Contest tour will kick off in Ibadan on the 2nd and 3rd of May, where fans can experience the electrifying energy of K-POP through dance and singing competitions, and also interactive experiences. From there, the tour will travel to Lagos, Port Harcourt, and Abuja, giving aspiring performers in each location the chance to showcase their talent on a grand stage at the finale which will take place in Lagos sometime in June.
The K-POP Fiesta contest will provide participants with a platform to showcase their talent, creativity, and love for K-POP. Participants will have the opportunity to compete in various categories, including singing, dancing, and even creating their own K-POP-inspired music videos. The contest will be judged by a panel of industry experts, ensuring a fair and unbiased evaluation.
Three winners in music and dance will emerge at the regional contest in these four cities with five hundred thousand naira up for grabs while the winner at the grand finale gets two million naira plus other exciting prizes.
In addition to the contest, attendees will also have the opportunity to experience LG’s latest innovations in entertainment technology. From high-quality sound systems to immersive displays, LG continues to push the boundaries of what’s possible in entertainment and lifestyle.
LG Electronics is committed to supporting and nurturing talent in Nigeria, and the K-POP Fiesta contest is just one of the many initiatives undertaken by the company to empower individuals and encourage artistic expression. By bringing the K-POP phenomenon to Nigeria, LG aims to create a memorable experience for both participants and fans alike.
To participate in the K-POP Fiesta contest, fans can register online at https://www.lg.com/africa/LG-Kpop-Fiesta or Join the conversation on social media (Instagram) using the hashtag #LGKPOPNigeria.
The contest is open to all K-POP enthusiasts in Nigeria, regardless of age or background.
The event had in attendance Management of LG Electronics, Nigeria Video Jockey & TV Presenter, V.J Adams, Akunna Okechukwu, 2021 Nigerian Idol finalist, among others.
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