Tax on airtime: Nigerians are undertaxed, expert reacts

A tax consultant, Dr McAnthony Dike, has reacted to the Federal Government’s plan to introduce excise duty on telecommunications airtime charges.

Dike, who is a former President of the Chartered Institute of Taxation of Nigeria, said the proposed plan was not out of place.

According to him, the plan was appropriate and would boost government revenue if well implemented.

“We are undertaxed in our country and one of the least in the continent, and how do we expect the government to meet its obligation.

“Our tax to Gross Domestic Product ratio is still within one digit regardless of our nation’s huge population,” Dike said.

He urged the political class to show leadership by reducing the cost of governance across board in line with the current economic realities.

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However, in an antagonistic reaction, another financial analyst,  the President Progressive Shareholders Association of Nigeria, Mr Boniface Okezie, said the timing of the tax idea was not good considering the impact of the COVID-19 pandemic.

“Nigeria has been paying one form of tax or the other, so introducing a new one will amount to multiple taxation.

“All these taxes will continue to weaken the purchasing power of our people,” Okezie said.

He suggested that the Federal Government should strengthen its diversification drive to boost revenue instead of initiating more taxes.

Recall that the Director-General of the Budget Office, Mr Ben Akabueze, said recently at a World Bank event that government was considering excise tax on telecoms airtime charges to boost revenue.

“Last year, we found that 51 countries in Africa have excise on airtime charges, so we are looking at that as well as an area to tax,” Akabueze said.

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