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Barely one week after the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele advised the federal government to impose an incremental tax on voice calls after the third minutes; the President of the Association of Telecoms Companies of Nigeria (ATCON), Engineer Teniola Olusola has described the move as counterproductive and wrong in all aspects.
Emefiele had given an indication during the 2016 bankers’ Dinner in Lagos that as part of efforts to raise revenue, he will suggest to government to impose taxes on phone conversations that lasted more than three minutes, hinting that the new tax will rake in well over N100bn annually.
But addressing ICT journalists in an interactive session in his office weekend, Teniola faulted the idea, saying the proposal was technically and economically wrong.
ATCON boss started his opposition from the fact that Emefiele never though it wise to consult with stakeholders in the telecommunications industry who will tell him that things do not work like that and that “Contrary to the CBN governor’s believe, it is the poor people who make more calls than the rich”.
“So, the proposal is not targeted at the middle or higher class, rather unfortunately the worst losers in recession and forex crisis hitting the economy now.
“I have not seen any industry where you don’t want people to use your products or services more. We want people to be speaking longer.”
While arguing that the CBN governor’s proposal for people to cut their phone calls after three minutes had not been founded on any theory, he said “In fact, you will now see that people will be cutting their calls”.
Continuing, Teniola said “It does not make sense, not only technically but economically, to apply that kind of thinking as a tool or solution out of the present economic recession, it is not going to work.”
He drew the attention of the CBN Governor that already, ATCON had proposed to the Senate, a one per cent VAT increase across all sectors, arguing that “This is a more realistic measure toward getting more revenue for the government.”
According to him, “the ICT industry had been envisaged to be the sector that will help the country gets out of recession”.
“But the sector should not be killed with over taxation. He suggested other ways the country could raise additional revenue to finance the increased expenditure that could engender fast and sustainable growth of the economy.
“I think we can consider introducing a negligible telecom surcharge to be entirely borne by the initiator of a call in order to protect the poor and vulnerable amongst us.
“We could structure it to only take effect after the third minute of talk.
“Some analyses have indicated that the government could earn about N100 billion per annum from this alone.
“Obviously, this surcharge will mainly be borne by middle and upper class people since I do not know many poor people who make calls for more than three minutes.