Why Tinubu Suspended Buhari’s 5% Telecom Tax

President Bola Ahmed Tinubu recently suspended the 5% excise duty on telecommunications and the Import Tax Adjustment Levy on certain vehicles. 

He also signed four executive orders into law to curb arbitrary taxation policy in the country.

This was announced by the Special Adviser, Special Duties, Communication and Strategy, to the President, Dele Alake during an interactive session with State House Correspondents.

Speaking on why Tinubu is reviewing some of the tax policies signed by his predecessor, Muhammadu Buhari, Alake said, The Tinubu Administration has since noticed that some of the tax policies are being implemented retroactively with their commencement dates, in some instances, pre-dating the official publication of the relevant legal instruments backing the policies. This lacuna has created some challenges of implementation.”

Alake who acknowledged that the intentions behind the upward adjustment of some of the taxes were noble said the taxes have “generated some significant challenges for affected businesses and elicited serious complaints amongst key stakeholders and in the business community.”

Tinubu’s administration highlight problems with the taxes

Tinubu’s Special Adviser further said, “Let me mention some of the problems we have identified with the aforementioned tax changes.  A document known as the 2017 National Tax Policy approved by the Federal Executive Council of the last administration prescribes a minimum of 90 days’ notice from the government to tax-payers entities before any tax changes can take effect.

He also added that “The Excise Tax of 5% on telecommunication services has generated heated controversy. There is also a lack of clarity regarding the status of this tax, just as players in the sector also complain about the imposition of multiple taxes on their operations.”

Alake hinted that the Tinubu’s administration has also seen that “the Green Taxes, including the Single Use Plastics tax and the Import Adjustment Levy on certain categories of vehicles, require more consultation and a holistic approach to the country’s net zero plan in a manner that does not impact the economy negatively.”