Call tariffs may increase, as Customs impose 5% duty on recharge cards

President Muhammadu Buhari has reputedly approved the collection of five percent excise duty on telephone recharge cards and vouchers.

According to an issued circular signed by the Minister of Finance, Budget and National Planning, Zainab Ahmed, directed the Nigerian Customs Service to create a tariff line for the collection of the excise on mobile telephones, electricity meters (components) and set up boxes at 5%.

The circular conforms with another list of excisable items by customs to include telephone recharge cards and vouchers at five percent.

The increase comes even as Telecom providers have written to the Nigerian Communications Commission, (NCC), seeking to increase call and SMS tariffs by 40 percent.

Recall that Telecom operators, under the aegis of the Association of Licensed Telecom Operators of Nigeria, (ALTON), on Wednesday asked for upward reviews in voice calls, short message services (SMS), and data costs.

ALTON had made the request in a letter addressed to the Nigerian Communications Commission (NCC), citing the rising cost of running the business as a reason.

According to ALTON, the proposed upward review of the price of calls will increase from N6.4 to N8.95, while the price cap of SMS will increase from N4 to N5.61.

Meanwhile, the Customs 5% duty is part of new items on the list of goods liable for excise duty on the Finance Act in the country.

It is understood that the Federal Government is expected to raise at least N150 billion from the duty while Customs will pocket about 10 billion, a 7% collection fee. The collection was part of new items on the 2020 Finance Act signed by President Buhari.

The new 5% levy on recharge cards will increase call costs and add to other taxes levied on telcos operating in the country.

Meanwhile, Telecom subscribers have opposed the move by the Telecom companies to hike tariffs.

The President, National Association of Telecoms Subscribers, (NATCOMS), Chief Deolu Ogunbanjo, said the operators should not in any way try to increase the yoke on the neck of suffering Nigerians by increasing tariffs at this time.

ALTON said since its members were not connected to the national grid, they rely on diesel to power the base transceiver stations, (BTS), the price of which had hit the rooftop, increasing by 35 percent.

It added that the introduction of the recent 5% excise duty on telecom services had further increased the burden of multiple taxes and levies on the industry.

Efforts to reach the Director, Public Affairs of NCC, Dr. Ikechukwu Adinde, were futile as calls placed on his mobile phone rang out without being picked up.

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