In the first six months of the year, value added tax on calls, SMS, data, and other information and communication services brought in N127.03 billion for the federal government.
According to information 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%.
The NBS stated the following on the sector’s contribution in the second quarter of 2022:
“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.”
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 uses “Telecommunication and Information Services: Gross Output: revenue from telephone, telex, facsimile, telegraph, and other income from satellite and internet services” to determine the sector’s contribution to the economy.
The administration claims that its goal is to strengthen initiatives designed to increase VAT coverage and collection. The government’s efforts to raise tax revenues have grown in light of declining oil income. Although telecom services provide a significant portion of VAT receipts, the government recently moved to impose a 5% excise fee, which would have raised the consumption tax on telecom services to 12.5%.
Isa Pantami, Minister of Communications and Digital Economy, disclosed that the industry pays a total of 41 taxes despite the scheme being stopped.
