CITAD Carpets Finance Minister Over Planned Hike on Telecom Services Excise Duty 

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Y.Z. Ya'u during the press conference.

THE Executive Director of the Centre for Information Technology and Development (CITAD), Engr. Y. Z. Ya’u, has condemned the planned increase of excise duty on telecommunication services in the country, calling it unacceptable as it is capable of creating more hardship for Nigerians in addition to undermining the country’s economic recovery.

 Engr. Ya’u, who stated this on Wednesday in at Kano at a press conference said the Minister of Finance and National Development, Mrs Zainab Ahmed, had recently revealed how her Ministry plans to increase excise duty on telecommunication services from the current 5.5% to 12.5%. 

Ya’u said the planned action by the minister “is driven by the need for revenue.” The effect of the intended hike, Ya’u added, will make calls and data costlier than the already expensive rates which majority are not able to afford.  

“The effect of the proposed increase is to make calls and data more costly in the context in which already Nigerians are paying heavily for this. Nigeria is one of the countries with low affordability index as calculated by the Alliance for Affordable Internet. 

“Currently only less than 45% of Nigerians can access and afford to use full spectrum of telecommunication services. This means that more than half of Nigerians are not able to do so for several reasons, chiefly among which is their inability to afford both the cost of access and cost of use. Nigeria does not manufacture telecommunication equipment and devices so it can hardly bring the cost of access and ownership down, however, it can control the cost of use,” Ya’u said.

Impending digital marginalisation

According to him increasing the cost of data and call translates to denying majority of the people access to the benefits of telecommunication. 

“If you increase cost of data and call, more people cannot use it. This means that the economic benefits of telecommunication would atrophy in the country. The multiplier effect will be lost since that can only accrue to the country when people freely use data for economic activities. In the end, the economy will suffer, and her ambition of higher revenue will collapse as less people will use telecommunication services and therefore less revenue to come while more people are excluded from digital technology in a context and time while even the UN has demanded that no one should be left behind.

“So instead of promoting policies and initiatives that will lift more Nigerians out of the depth of digital marginalization, Madam Minister is acting to bring down more Nigerians, and increase the digital divide which the Ministry of Communications and Digital Economy has been working to bridge.” 

Ya’u said in addition to digital marginalisation, the proposed policy will “frustrate the attainment of the goals of the country’s digital economic transformation agenda” which he said was personally endorsed by President Buhari.

According to him, the agenda “requires that the country increase broadband penetration to 95% by 2030 and to achieve 95% digital literacy by 2025.”

Stating that making data costlier “would undermine these lofty goals. Because people cannot afford telecommunication services, telecommunication companies will have no incentive to invest more and expand their infrastructure, a condition that is needed to achieve the 95% broadband penetration, and once these goals cannot be realised, the objectives of the digital transformation agenda will fail.”

Education to suffer

Ya’u also noted that the planned increase will also negatively affect education as more educational services are now migrating online.

He said: “On a more immediate and concrete level, our education system will suffer. Presently more services are migrating online. Students must sit and pass the computer-based examination that is online. They must use this data in an economy in which more [than] 70% of Nigerians are living below poverty level, this means many more people cannot afford education services. And a country where people cannot access education services is doomed. 

“Both the telecommunication companies and the Minister of communication and Digital Economy have spoken against the proposed increase. The minister in fact stated that he was never consulted for such a matter which is his responsibility and oversight. 

“We agree with the minister and the body of telecommunication companies that such a move will push the burden on the ordinary users and is counterproductive. 

“While commending the Minister of Digital Economy for being bold to object that such a measure is not in the interest of the country, we condemn the Minister of Finance and her blind pursuit of revenue for its sake and on driving the economy to make meaning of the lives of citizens. 

“We call on the President to immediately call her to order and jettison the proposed increase.

“Instead, we call on the president to quickly set in motion the processes of developing a National Policy on Community Networks so that communities can on their own address infrastructure and other access gaps in the country.”

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