Editorial
No To Proposed Telecoms Tariff Hike
Telecommunications consumers in Nigeria may need to constrict their belts in the days ahead as the Federal Government has completed plans to impose a five per cent excise duty on all telecommunications services ranging from calls, SMS, and data services.
The Minister of Finance, Budget, and National Planning, Mrs Zainab Ahmed, disclosed this at a stakeholders’ forum on implementation of excise duty on telecommunications services in Nigeria in Abuja. The event was organised by the Nigerian Communications Commission (NCC). Since the disclosure, Zainab has been pressing that the scheme must be implemented as proposed despite opposition by stakeholders.
According to reports, the five per cent will be added to the already existing 7.5 per cent Value Added Tax (VAT) on telecommunications services. Zainab said the five per cent excise duty is a provision in the Finance Act 2020 but was not carried out. She attributed the delay of its implementation to government’s engagement with stakeholders. The proposed tax, if enforced, will increase impost in the sector to a total of 12.5 per cent.
Like many other countries around the world, Nigeria’s economy has been hit by the COVID-19 pandemic, insecurity and the recent ongoing Russia-Ukraine war. A recession is imminent, food shortages are looming, chronic oil theft continues to compound the problem, leaving the mono economy huffing and puffing.
The 36 state governors have chimed the alarm that they may not be able to pay workers’ salaries in the coming months because of the fast depleting income in the federation accounts. Following these concerns and more, the Finance Minister has seen telecommunications as a sub-sector with the magic wand to save the collapsing economy. The Federal Government must realise that Nigeria’s fiscal challenge is not generaion but reckless expenditure.
The present economic realities in the country render the introduction of such taxes unrealistic and insensitive. The Finance Minister should pay very close attention to the comments of the Minister of Communications and Digital Economy, Prof Isa Pantami, who described the proposed tax as “ill-timed”. Pantami deserves commendation for being on the side of the masses who are suffering the worst economic policies in the history of the country.
At the maiden edition of the Nigerian Telecommunications Indigenous Content Expo (NTICE) organised by the NCC in Lagos, Pantami said he had not been informed officially about the proposed excise duty and promised to challenge the decision. This is an indication that President Muhammadu Buhari’s government is working at cross purposes. Although the government will make about N165 billion annually from the tax regime, the decision will impoverish millions of Nigerians.
Excise taxes are usually imposed to discourage the consumption of certain goods such as alcohol and tobacco. In a digitized world, increased taxes on telecommunication services like calls and data will inhibit social interaction and the provision of goods and services. This will adversely affect learning as many institutions now conduct lectures through online channels. It will also limit access to information and participation.
Our standpoint on the mooted tax is consistent with Pantami’s perspective. We reject it because it is insensitive and coming at the wrong time. The scheme would negatively impact the sector. Having observed the immense contribution of the telecom industry to the economy, we urge the Federal Government to rescind the decision forthwith. Such imposition would further aggravate the agony of the Nigerian masses who have already been shoved into adversity and intense poverty.
Similarly, major stakeholders in the sector are kicking against the initiative. The Association of Licensed Telecoms Operators of Nigeria (ALTON), Association of Telecommunications Companies of Nigeria (ATCON) and National Association of Telecoms Subscribers (NATCOMS) are together indisposed to the plan, describing it as anti-people, provocative, strange, insensitive and irresponsible.
Furthermore, the suggested new tax regime is a bizarre idea and a unique development as it is being introduced amid 39 disparate taxes payable by the telecom operators in the country. Certainly, this new tax burden would be passed on to subscribers. Globally, excise duty is charged on goods and products. We are thunderstruck and at a loss as to why this is on services. That is not the case with many other countries.
Rather than saddle Nigerians with manifold taxes, the Federal Government should activate other sources to address the current economic challenges, alarming unemployment, plummeting exchange rate and financial hardship on the citizens. The economy is at its lowest ebb as the purchasing power of Nigerians has dwindled in the face of galloping inflation. Basic domestic commodities, power, energy, and transportation are unreachable for the average Nigerian.
If the five per cent duty tax is put into effect, it is conjectured that it could cost several jobs and lead to a crucial contraction in the sector. The ripple effect could be ill-fated to Nigerians who are burdened with numerous taxations. The government should discontinue the measure, dialogue with stakeholders and find long term solutions to revenue shortfalls in the country, not by frequent resort to desperate quick-fix solutions.
Granted the government needs money, but taxing the telecom sector should not be the only pathway it always seeks to explore. The sector already contributes a lot to the Nigerian economy, and adding more taxes could impact its growth negatively. It will virtually raise tariffs with no direct advantages for either the subscribers or operators. Perhaps, it is time the government began to contemplate taxing other sectors of the economy that are not contributing to national development.
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Editorial
That Oshiomhole’s Call On FG’s Road Projects
There are moments in the life of a legislature when plain speaking becomes a public service. Senator Adams Oshiomhole provided such a moment on the floor of the Senate when he accused the Minister of Works, Senator David Umahi, of manifestly neglecting critical federal arteries in Edo and Delta States, and implored his colleagues to prevail on the Minister to adopt a more equitable and genuinely national approach to road infrastructure delivery. It was blunt, it was uncomfortable, and it was necessary.
The specifics of his complaint deserve restating. Drawing attention to the recent approval of some 20 new road projects despite the parlous state of existing ones, the former Edo State governor lamented that Nigerians cannot travel from Benin to Warri, Benin to Asaba, Benin to Auchi, or Auchi to Okene without encountering severe distress. He alleged a deliberate omission of these corridors from the national budget in the last three years, save for palliative interventions directed by President Bola Tinubu through tax credit arrangements. His question — “What have we done wrong?” — resonates far beyond the chambers of the National Assembly.
We lend our full and unequivocal support to that call. The Auchi-Benin Road, for instance, has been in a deplorable and near-impassable condition for several years, turning what should be a two-hour journey into an all-day ordeal of broken axles, extortionate fares, and despondent commuters. The media have, on multiple occasions, chronicled the suffering of motorists, traders, and students who ply that route. To describe it as a federal road today is to stretch the meaning of the term beyond recognition.
This pattern of sidelining is not confined to Edo or Delta. Even here in Rivers State, the disposition of the Federal Ministry of Works has left much to be desired, particularly along the Eleme axis of the East-West Road. That road, which ought to be a flagship of federal presence in the Niger Delta, has remained in a wretched state for long. Those who use it daily — workers at the Eleme Petrochemical Complex, the two refineries, Onne Port, and the countless ancillary industries — can attest to its deterioration. Work has proceeded in fits and starts without the sustained urgency such a strategic road demands.
The Eleme stretch is not a mere intra-state byway. It is the gateway to the nation’s economic jugular. According to the Federal Ministry of Works and Housing’s 2023 Highway Condition Survey, only about 35 per cent of the country’s 36,000 kilometres of federal roads are rated as being in good or fair condition, with the remainder classified as poor or very poor. The East-West Road, conceived in the 1970s to bind the entire Niger Delta, remains unfinished in critical sections more than four decades after. If it had been treated as a priority, the perennial gridlock, carnage, and economic loss on the Eleme-Refinery junction would have long been consigned to history.
The irony is as painful as it is glaring. The Niger Delta remains the goose that lays the golden eggs. Data from the Nigeria Extractive Industries Transparency Initiative [NEITI 2023 Oil and Gas Audit] show that the region still accounts for over 78 per cent of Nigeria’s federally collected export earnings and about 65 per cent of total government revenue. The National Bureau of Statistics [NBS Foreign Trade Report Q4 2024] similarly confirms that crude oil continues to dominate export receipts. By every metric of equity and economic logic, a region that sustains the national purse deserves first-rate consideration in the allocation of infrastructure, not afterthoughts and tokenism.
Road infrastructure is not largesse to be dispensed by favour; it is the skeleton upon which commerce, cohesion, and citizenship hang. When contracts are concentrated in one geopolitical zone while other zones are left to contend with craters, it erodes trust in the federation itself. The World Bank’s Nigeria Development Update [June 2023] estimated that poor transport connectivity inflates the cost of moving goods by up to 40 per cent and costs the Nigerian economy an estimated $1.5 billion annually in lost man-hours and vehicle maintenance. If we profess to be one country, then equity must be the compass that guides key institutions before any project is executed. Development must spread round, not pool in one place as though other regions do not matter.
There is also a grave security dimension that can no longer be ignored. The deplorable condition of federal roads has become a veritable enabler of criminality. The NBS Crime Experience and Security Perception Survey reported over 2.5 million incidents of kidnapping-related occurrences nationally, with transport workers identifying bad road spots as prime ambush points. When vehicles are forced to crawl at 10 kilometres per hour through failed sections at Auchi, Sapele Road, or Eleme, they become sitting ducks for armed gangs. Fixing bad roads, therefore, is not merely about convenience; it is about safeguarding lives.
By his intervention, Senator Oshiomhole has hit the nail on the head and reminded Minister Umahi of a fundamental constitutional truth: public office is held in trust. The Ministry of Works is not a personal estate where contracts are awarded according to whim or political convenience. It is a national institution funded by the collective resources of Nigerians, including the oil and gas rents from the very communities whose roads are now neglected. The Minister must demonstrate balance, transparency, and a pan-Nigerian outlook in the distribution of projects that impact the daily existence of citizens. Selective neglect breeds suspicion, and suspicion is corrosive at a time when the nation is preaching unity, oneness, equity, and justice.
Consequently, the National Assembly must go beyond rhetoric and assert its oversight powers with vigour. Sections 88 and 89 of the 1999 Constitution [as amended] empower the legislature to investigate and expose any maladministration in the execution of federal projects. If an office holder is not acting rightly, it is the duty of the Senate and the House of Representatives to call him to order. Oversight must not be reduced to budget approval ceremonies; it must translate to field verification, public hearings, and insistence that the Federal Character principle, as enshrined in Section 14(3) of the Constitution, reflects in road awards.
Let the Auchi-Okene, Benin-Warri, Benin-Asaba, and Eleme East-West gangways be restored to motorable dignity. Let priority be given to completing existing, economically vital roads before embarking on new ones. If those who, through their resources, sustain the federation are sidelined in the distribution of tangible dividends, it tells poorly of our nationhood. Bad roads must be fixed, and they must be fixed now, with fairness as the guiding standard.
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