The Federal Government has reintroduced a 5% excise duty on telecom services, which could impact on your business operations. Although the new policy was put on hold last year, a recent circular dated April 20, 2023, indicates that the government plans to implement the 5% excise duty on telecom services as part of the fiscal measures for 2023. The telecom providers have warned that customers will have to bear the cost of these new taxes.
With the current inflation rate at 22.04% and rising, SMEs in Nigeria need to be prepared for these new changes. This means that SMEs that rely on mobile communication and data services for their operations will face higher costs, which could impact their profitability and competitiveness. For example, businesses that rely on phone calls to communicate with customers or suppliers may see their communication costs increase, which could impact their ability to maintain relationships with key stakeholders. Similarly, businesses that rely on data for research, marketing, or other activities may see their costs increase, which could impact their ability to make informed decisions or reach new customers.
The increased cost of mobile communication and data services may also impact the ability of SMEs to compete with larger, more established businesses that have greater resources to absorb the additional costs. This could lead to market consolidation and reduce competition, which could have a negative impact on consumers.
Some of the strategies that SMEs can consider to mitigate the impact of the new telecom tax include:
1. Reviewing their current mobile communication and data plans to identify areas where they can reduce costs without compromising on quality.
2. One potential solution to offset the impact of the new telecom tax is to explore alternative communication channels that may be more cost-effective, such as email or instant messaging services.
3. Investing in technology solutions that can help streamline operations and reduce the need for mobile communication and data services, such as cloud-based software or collaboration tools.
4. Collaborating with other SMEs to negotiate bulk discounts on mobile communication and data services.
Being proactive in adapting to changes in the business environment is key to staying ahead of the game. Stay informed and be prepared for the future.
Signal Alliance Technology Holdings is one of the leading integrators for corporate businesses in Nigeria. We develop, consult, implement, and manage integrated technologies that reshape the productivity of organizations in the private and public sectors.