Recall that in an effort to generate revenue to support the national budget in light of declining oil revenues, the federal government recently imposed a 5% excise duty on telecommunications services.

At the maiden Nigerian Telecommunications Indigenous Content Expo on Monday in Lagos, Pantami announced that he would take additional action to ensure that the federal government would reverse its decision.

Beyond, making our position known today, we will go behind the scene and go against any policy that will destroy the digital economy sector. This is a sector we cherish so much and we are ready to go to any extent, legitimately and legally to defend its interest,” the minister added.

The minister disclosed that the Nigerian Communications Commission (NCC) was not formally contacted and also criticised the decision-making process for not including the head of the House Communications Committee.

He said, “We have not been contacted officially. If we were, we would have pleaded our case. As a minister and based on the provision of the constitution of Nigeria, session 148, we are exercising the power of Mr president.

“When VAT was increased to 7.5 percent, I was not consulted, I only heard the announcement and I think there is something questionable about the process.

We are on the same page with our national assembly members. They too were not consulted despite the fact that they are part of the committee.

Pantami said the recent 2020 Q2 Gross Domestic Product (GDP) Report, released by the National Bureau of Statistics (NBS) showed that Information Communications Technology (ICT) contributed an unprecedented 17.83 percent to Nigeria’s total GDP, adding that the sector should be encouraged, and not discouraged by multiple taxations.

“You introduced excise duty to discourage luxury goods like alcohol. Broadband is a necessity. If you look at it carefully, Broadband contributes 2 percent to 7.5 percent to the economy. Imposing five percent excise duty on operators will only bring hardship at this time, and that cannot be tolerated,” he averred.

Pantami however advised the federal government to expand the scope, by taxing other sectors, while urging operators to come together and salvage the sector.

In efforts to support indigenous companies, the minister also tasked the Nigeria Office for Developing the Indigenous Telecom Sector (NODITS) to strictly enforce the National Policy for the Promotion of Indigenous Content in the Nigerian Telecommunications Sector.

The minister disclosed that the annual outflow of foreign exchange for the telecommunications sector amounts to approximately $2.16 billion, adding that this is a significant portion of the sector’s average annual budget and this trend must be reversed.

“There is also a higher percentage of foreigners among top management staff when compared with other staff, with Nigerians making up to 31 percent, in relation to foreigners who make up to 69 percent. For software, 77 percent of software in use is foreign, while only 23 percent are obtained locally. “