FG Makes N127.03bn Tax From Calls, SMS

FG Makes N127.03bn Tax From Calls, SMS

In the first six months of the year, the Federal Government got N127.03 billion from value-added tax on calls, SMS, data, and other information and communication services.

According to data from the National Bureau of Statistics, this represents 10.69% of the total N1.19tn that was collected as VAT during the time period under examination. The cost of using telecom services is subsidized by the government at 7.5%.

In regards to the sector’s contribution in the second quarter of 2022, the NBS said, “In terms of sectoral contributions, the top three largest shares in Q2 2022 were Manufacturing with 33.08 per cent; Information and communication with 18.98 per cent; and Mining & quarrying with 10.60 per cent.”

According to the NBS’s classification for the Gross Domestic Report, the information and communication sector includes the activities of publishing, motion picture, sound recording, and music production, telecommunications, and information services.

The largest subsector in the sector, telecoms accounts for nearly 80% of the GDP contribution of the entire sector. In the first half of 2022, the subsector contributed 76.29 percent and 79.49 percent, respectively, to the sector’s nominal and real GDP.

It provided N4.84 trillion in real GDP and N7.94 trillion in nominal GDP to the country. The NBS takes into account when determining the sector’s economic contribution: “Telecommunication and Information Services: Gross Output: revenue from telephone, telex, Facsimile, telegraph, and other income from satellite and internet services.

“Intermediate consumption: transit fees, operational expenditure, minor repairs and maintenance and other expenses. Publishing: Gross Output: revenue from publishing services.

The Government claims that this will increase efforts to improve VAT coverage and collection. The government has intensified efforts to raise tax revenues in light of declining oil income. Despite making up a significant portion of VAT receipts, the government recently moved to put a 5% excise fee on telecom services, bringing the consumption tax on telecoms to 12.5%.

According to the Minister of Communications and Digital Economy, Isa Pantami, the sector pays a total of 41 taxes even if the scheme has been stopped.

He said, “Excessive taxation has been a central challenge of the Information and Communications Technology sector.”

 

 

Related post