Bismarck Rewane, Chief Operating Officer (COO) of Financial Derivatives Company (FDC) Limited said, the suspended telecom tax was a kiss of death and that the Federal Government proposed the tax because they now see the secor as a fat cash cow to be milked to fund the ever increasing budget deficit.
“To an already stretched Nigerian consumer who is gasping for survival, any suggestion of a new tax payment is a kiss of death. This is why the hint of an excise tax (on calls and data) was an unwelcome development” said Rewane in FDC Bi-Monthly publication.
The Federal government has now suspended the tax as it looks for new ways to fund the burgeoning fiscal deficit which is 5.5 per cent of GDP.
“Policy makers have two minds about the telecom sector in Nigeria. It is seen as a catalyst of growth and an engine of financial inclusion, but also as a fat cash cow to be milked”, he said.
This is because, according to the EIU, “Nigeria is the third-largest telecommunications market in Africa (after South Africa and Egypt) measured in terms of subscribers. Subscriptions in both the mobile and fixed broadband segments have grown markedly over the past decade. This has led to a sharp rise in the sector’s economic performance. In the first quarter of 2022 its contribution to GDP amounted to 12.8 per cent, up from 8.5 per cent in 2012”.
