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…As ATCON fears shrinking N450bn yearly contribution to GDP
Confusion may be the best word to describe a scenario that is currently playing out at the National Assembly over the recent introduction of Nigerian Communication Tax of 9% Bill by Borno Senator, Ali Ndume.
Only last week, the Bill which analysts say is draconian passed first reading at plenary. But the same week, President of Ghana, Nana Akufo-Addo cancelled the country’s recently introduced 9% communication service tax on mobile networks.
This is as the Association of Telecommunications Companies of Nigeria (ATCON), has observed that such tax will among other things, cut down the sector’s N450 billion yearly contribution to the country’s Gross Domestic Product (GDP).
President of the telecoms pressure, Engr Olusola Teniola, insisted that passage into law of the CST Bill will prevent Nigerians from having access to affordable voice and data tariff which will translate to serious drop in ease of doing business and sector contributions to the GDP.
Business Hilights Ghana Bureau chief had last week reported that “On Monday 1st October 2019 the Ghana Chamber of Telecommunications announced that mobile users would pay 9% Communication Services Tax.”
However, on grounds of rising mass apprehension which forced Ghanaian telecoms subscribers to lambast the Akufo-Addo led government for disappointing Ghanaians, the government announced suspended the tax.
Some industry experts who spoke with our correspondents across the nation on Sunday, report that majority of Nigerians expressed anger on the way and manner the current administration is jerking up taxes and introducing new ones in an economy that is pressured by lack of jobs and low standard of living.
Many respondents who observed that Ndume, the sponsor of the Bill might have copied the idea from Ghana and the Senate may not be in a hurry to drop the Bill because Ghana has halted the tax regime.
They said due to the paucity of fund to run the budget, the Executives may pressure on the National Assembly not to dump the Bill, but to go ahead so as to get revenue from Nigerian phone users.
It would be recalled that few weeks ago, the Chairman of Federal Inland Revenue Service (FIRS), Mr Tunde Fowler, who is currently battling in court to stay in office due to a suit seeking his removal because of his tenure had long elapsed, said Nigerian talk too much on phone and there should be taxed accordingly.
Efforts to get reactions from the Nigerian Senate on the chances of the Bill surviving failed On Tuesday.
Details of the emerging law indicate that when passed into law will be levied on the consumers of voice calls, MMS, SMS, data usage and Pay per View TV services provided by mobile telecommunication and internet service providers.
Teniola said government can look at other means of increasing taxes, especially by widening the tax base, noting that the telecoms sector is currently faced with the challenge of multiple taxes.
This, had resulted in service providers paying about 39 different taxes on an already overburdened sector, which adds about N450 billion to the country’s GDP.
“That contribution will increase if the sector is allowed to breathe, and it will go down, if the sector is stifled with unnecessary taxes. Government should look at reducing its cost. Senators should rather also look at how government spends this N450 billion rather than promoting bills that will stall inclusion.’’
Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.