TECHDIGEST – Taxation is one of best ways of generating revenue for countries all over world. Over the decades, Nigeria has been struggling to beef up her revenue from taxation but that has proven difficult due to policy limitations, corruption, lack of patriotism and the tendency for most Nigerians to try to cut corners.

Since 2015 however, the present administration has put together a couple of ground-breaking laws, policies and initiatives to expand the tax net, get millions of more Nigerians to pay taxes and beef up the country’s revenue base. From the time of Babatunde Fowler who headed the Federal Inland Revenue Service (FIRS) to the present leadership led by Muhammad Umar, trillions of naira have been generated in tax revenues for the federal government.

The FIRS in the year 2021 collected a total of N6.405 trillion in both oil (N2.008 trillion) and non-oil (N4.396 trillion) revenues beating the target of N6.401 trillion.
Companies Income Tax amounted to N1.896 trillion; Petroleum Profits Tax amounted to N2 trillion; Value Added Tax amounted to N2.07 trillion; Electronic Money Transfer Levy amounted to N114 billion; and Earmarked Taxes amounted to N208.8 billion.

Meanwhile, since the coming of Professor Isa Ali Pantami as Minister of Communications and Digital Economy and his team of experts, tax revenues from ICT and telecommunication have increased in multiple folds. This is due to the unprecedented reforms they brought on board.

Nigerians are being taxed and they are paying heavily. This must be the reason why the recent idea of extra five percent telecom tax has not been well received by the masses.

READ ALSO: Pantami to lead discourse at Nigeria Internet Governance Forum 2022

While the government through the Minister of Finance, Budget and National Planning, Zainab Ahmed, is willing to expand it’s revenue through the imposition of additional taxes such as the 5 percent excise duty on telecom services, they need to be wary of over-taxing people and taxing the poor masses to death.

In fact, any arbitrary imposition of such taxes on already impoverished masses could spell doom for the government as it can lead to some form of revolt or rebellion. Fortunately, to the delight of many, Prof Pantami recently announced the suspension of the 5 percent telecom tax.

He made the announcement during the inaugural meeting of the Presidential Committee on Excise Duty for the Digital Economy Sector in Abuja.

One of the reasons he gave was that the digital economy is already facing the problem of excess taxation and sometimes, multiple taxation. The minister therefore considered any other form of taxation as insensitive to Nigerians.

Unfortunately however, contrary to the pronouncement by the minister, the Director-General of the Budget Office, Ben Akabueze, said the issue was still on, that the federal government had not suspended it.

This has thrown spanner in the works as Nigerians thought they would heave a sigh of relief and escape what looks like a punishment from the government in the face harsh economy – high unemployment, underemployment inflation rate, poverty rate, low purchasing power, poor value of the naira etc.

I will use this opportunity to advise the federal government to listen to the wise counsel of Pantami and not do something that will deemed insensitive.

This crusade doesn’t mean tax is not important. Taxation is the bedrock of infrastructure development and Nigeria’s evolution in taxation is an interesting one.

During the 1970s and late 80s, attention was focused on oil revenue, so much that all the states in the country depended solely on revenue from the Federation Account. However, the dawn of global recession showed an intense fall in oil prices and by extension reduced revenue from the Federation Accounts, the overdependence on income from oil generated a disparity in the implementation of some of the fiscal policies.

Governments (Federal, State, and Local) began to look inwards, focusing on Internally Generated Revenue (IGR) as a sustainable means of funding as insolvency hovered among the states. The revenue accruing to the Federal Government of Nigeria from oil over the years has remained grossly insufficient to meet the growing social and public spending required in facilitating economic growth and infrastructural development in the country.

Hence, Nigeria employed taxation as an alternative to the source of revenue when crude oil revenue began to fluctuate. The contribution of taxation to all economies around the world cannot be overemphasised. Apart from the revenue function it performs for the government, it is also used to help the country achieve its macroeconomic goals in the areas of fiscal and monetary policies.

While I will conclude by urging Nigerians of taxable ages to pay their taxes as at when due and stop shortchanging themselves by hoarding monies that could be used to provide infrastructure, it is equally important for the federal government to stay action on the issue of extra five percent telecom tax as it is a very bad Idea that is coming at very bad time.

Vivian is a Mass Communication student at Ahmadu Bello University (ABU), Zaria.

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TECHDIGEST – Experts in the telecommunication industry have said the move by the Federal Government to tax social media companies is right because the companies generate commercial revenues from the nation.

According to Meta, 7.5 per cent value-added tax will be applied on sales of ads to advertisers from January 2022, and this applies to all non-resident businesses that provide digital service in the nation.

The company’s spokesperson said, “Starting in the New Year, Nigeria will implement a new value-added tax. This law requires all non-resident businesses that provide digital services to charge an additional 7.5 per cent in tax. This includes advertising services like those from Facebook.

“Facebook is required to charge VAT on the sale of ads to advertisers, regardless of whether you’re buying ads for business or personal purposes. All advertisers with a business in the country of Nigeria will be charged an additional 7.5 per cent VAT on advertising services purchased beginning 1 January 2022. As with all VAT, companies like Meta will be collecting this tax on behalf of the Nigerian government.”

The National Coordinator, Alliance for Affordable Internet, Olusola Teniola, noted that the move by the FG was aimed at increasing its revenue through taxes.

He said, “It is all under the auspices of the government trying to increase its revenue. There has been a debate even amongst the OECD countries, as to how they can achieve taxation of digital companies.

“And there has been an agreement that there should be an adopted taxation model. The issue here is that Africa is the weaker partner under the OECD countries. So, when the developed countries that form part of the OECD agreed to tax up to about 15 per cent of revenue generated from their countries, they didn’t consider revenues generated from African countries.

“So, each country is having to devise a method as to how it can estimate the amount of taxation due to them from the transactions made on these platforms. Recently, there has been an agreement that any transaction on these platforms will attract a levy.

”According to Teniola, Nigeria’s approach is very similar to that of Ghana.

He added, “I think Ghana is also placing a levy on not only social media transactions, but on many other such transactions.

“But for us as an industry, we need to find a way to engage the government on a way to cushion the effect on consumers.”

He said since the VAT would naturally be transferred to the consumer, a way to cushion this impact, especially as the increase in digital transactions would continue, had to be adopted too.

The President, National Association of Telecoms Subscribers, Adeolu Ogunbanjo said, “One of the things the Federal Government has said to social media companies is how to tax them. Facebook is being used for adverts, commercially, which calls for some sort of taxes, which of course is one of the duties of this government: to widen the tax net.

“However, because we are using it for advertising, I think this move is only right. And we have been informed by the way. They’ve carried us along – which is one of our rights – that there would be tax and that they are negotiating with the owners of these social media companies. I think it is alright as the Federal Government would have more revenue.

“We need to wait and see how the tax would be implemented first before we criticise this move.”

Recently, the Minister of Finance, Budget and National Planning, Zainab Ahmed, hinted at the introduction of new tariffs and levies as the nation’s economy continues to recover in 2022.

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By Mohammad Dahiru Lawal

TECH DIGEST – Perhaps, the most stunning thing about Digital Technology, especially Digital Media, is not only the uses and gratification derived from it’s utilization, but the accelerated pace at which it is becoming an embedded aspact of our daily lives.

With Digital Media Technology focusing on enabling technologies for Digital Media systems, including technologies for analysing media, generating interactive media, processing and coding, including optimizing inputs for desired output, the submission of renowned Canadian Philosoper and Media Theorist, Marshall McLuhan which posits Media as an extension of man as reflected in his popular coinage, “the medium is the message,” is fast becoming a premium reality.

So, when the Federal Ministry of Finance, Budget and National Planning in collaboration with the Nigerian Customs Service (NCS) gathered it’s officers and men alongside gentlemen of the press, Nigerian Millitary, Manufacturers Association of Nigeria ( MAN), and other critical stakeholders in Nigeria’s economic growth at the Auditorium of Customs Training College Kano for a one-day sensitization seminar on the “Automated Import Duty Exemption Certificate (IDEC) Processing and Approval,” it was obvious that a new automated platform was about to be unveiled, but what was not obvious however was the wholistic and transparent nature of the Technology particularly coming from government arms that are not insulated from suspicion in financial dealings.

The platform which is simply accessible at www.idec.gov.ng or www.idec.ng was designed to eliminate the challenges associated with applying for an IDEC which usually takes between 30 – 60 days but is now obtainable within just three days. It has a solid electronic document management system that manages all documents verifications, thereby reducing the processing time to obtaining an IDEC approval.

The most fascinating part of it all for me when a demo of the procedure for application was displayed was the totally transparent nature of the platform which is guaranteed to not only block leakages with it’s attendant positive effects, but also promote trade efficiency, boost investors confidence, transparency and ease of doing business.

This development not only marks another dawn with using the Internet of Things (IoT) in driving Nigeria’s economic growth, but also speaks to the visionary vision of the duo of Nigeria’s Minister of Finance Budget and National Planning, Mrs. Zainab Ahmed and Comptoller General of Customs, Col. Hameed Ibrahim Ali rtd, in leveraging on the Federal Government’s interest in promoting and sustaining transparency and efficiency in delivering services in the public sector domain and organized private sector by subjecting their portfolios towards making digital transformation a national priority.

Though both ably represented by the Honourable Commissioner of Finance and Economic Development, Kano State, Honourable Shehu Na’Allah Kura and Commandant of Customs Training College Kano, Comptoller, Lawrence Banye respectively, the Minister of Finance Budget and National Planning, Mrs Zainab Ahmed and the Comptroller General of Customs, Col. Hameed Ibrahim Ali rtd, have proved thier mettle as digitally inclined reformers, especially in using the rapidly evolving IoT to conduct Government business for the purpose of efficiency and transparency.

When In 1999, Kevin Ashton coined the term “the Internet of Things” not many paid heed until it gained momentum in 2011, after a Gartner report added it to the list of new emerging technologies.

Since then, IoT gained global coverage, as more companies worked on advancing and applying it

In the past, people referred to IoT as “embedded internet.” Today, IoT as a technology that enables users, systems, and devices, to connect to a wide range of networks, thus expanding the connectivity between the physical and the digital, is embedded in many aspects of our lives and as more organizations and governments make digital transformation a priority, the adoption of IoT technology increases.

In 2018; there were 7 billion IoT devices in the world, In 2019; there were 26.66 billion active IoT devices, in 2020; experts estimate the installation of 31 billion IoT devices worldwide. With IoT being connected to the world wide web every 127 seconds, by 2021 35 billion devices would have been installed worldwide with numbers estimated to reach 75 billion by 2025.

That Messrs Ali and Zainab understand this trend and it’s great potentialities, is not only stunning but also serves as a charge on Journalists to not only flaunt their pen towards breaking the great news but to also advocate for it’s concerted adoption by target beneficiaries.

One of the beneficiaries present, Alhaji Ibrahim Shehu, the North West Zonal Coordinator, Nigerian Agricultural Quarantine Service expressed satisfaction, stating the the platform is coming up at the right time.

“I am highly impressed, the essence of the IDEC is to industrialise the nation. Thereby reducing unemployment. If there are exemption for importion of materials and equipments, a lot of industries will be able to set up thereby employing the unemployed which reduces unemployment and by implication the criminal activities that we have been experiencing due to lack of job for our youths in the country.”

Sunusi Wakili a Customs broker described the Technology as a fantastic one which has removed the dichotomy between prospective importers, IDEC beneficiaries and the conflict between Customs and importers especially on the issue of value of import or name applicable on IDEC and what is applicable on the import document.

“This is clearly new generation which will cripple any corruption and honestly, IDEC online has done away with the corrupt tendencies of some Nigerians who think we know man to man and go and negotiate IDEC for IDEC” he said.

The Commandant of CTC Kano while speaking on behalf of the Comptroller General, confirmed that the Minister of Finance have authorised the discharge of the platform in Kano, Lagos and PortHarcourt.

With the adoption of such platforms which reduces human interferences in highly sensitive transactions like the IDEC, it goes without saying that a new era for transparency in the conduct of government businesses have arrived and the pacesetters are obvious.

Mohammad Dahiru Lawal, a development Journalist, writes from PRNigeria Centre Kano via mdlawal001@gmail.com

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