The approval of a five percent exercise duty on telephone recharge cards by the Federal Government is more of an indirect tax, Mr. Adebayo Adesina, President of Chartered Institute of Taxation of Nigeria (CITAN), said on Monday.
Adesina said this in an interview with the News Agency of Nigeria (NAN) in Lagos.
“This sort of taxes is factored in the purchase of a commodity, with the individual paying without being aware as much.
“The purpose is to boost government fiscal revenue, and a common practice in many advance countries,” Adesina said.
He noted that introducing these taxes would boost the government’s fiscal revenue position, particularly in this era of declining revenue.
“While the people expect the government to be prudent and judiciously utilize the funds to provide a public good.
“The authorities must begin to be more accountable to the people in order
to enhance trust and key into their policies with no objection,” he said.
However, Prof. Sherifdeen Tella, Head of Department of Economics, Olabisi Onabanjo University, Ago-Iwoye, Ogun, said the new taxes on recharge cards was unnecessary.
“The introduction of the new taxes on recharge cards is not fair giving the economic condition of an average Nigerian.
“Nigerians have been dealing with soaring inflation and weak purchasing power and implementing this policy will exacerbate their woes,” he said.
He noted that the tiers of government should cut down the high cost of governance, so as to free funds rather than imposing taxes.
NAN reports that the Federal Government on May 5 approved the collection of five per cent as excise duty on telephone recharge cards and vouchers.
The charge is part of new items on the list of goods liable for excise duty on the Finance Act in the country.
Excise duty is a levy charged at the time of manufacturing.
It is also a form of indirect tax on the sale or consumption of certain goods and products.
