Stakeholders, others want National Assembly to jettison Communications Service Bill

Major stakeholders in the Information and Communications Technology (ICT) in Nigeria as well as many other Nigerians have continued to voice their opposition to the proposed Communication Service Bill. Major ICT associations like the National Association of Telecommunications Subscribers (NATCOMS), the Association of Telecommunications Companies of Nigeria (ATCON) and the Association of Licensed Telecommunication Operators of Nigeria (ALTON) among others have also condemned the bill, saying it will further add to the yoke Nigerians are carrying.

It is recalled that the National Assembly is currently working on a bill that will introduce taxes on usage of communications services in the country. The Bill, entitled ‘Communication Service Tax Bill (‘CST’ or the ‘Bill’) 2015’, seeks to impose, charges and collect CST and will be levied on service fees payable by users of electronic communication services at nine per cent and will be borne by the customers. The rate of the CST, which is proposed at nine per cent of the service charge for the use of communication service charged by service providers, is seen by fiscal experts as among other taxes being imposed by the government to shore up its revenue base as the whirlwinds in the international oil market continue its depreciative impact on accruable earnings by the country from crude oil exports.

Only recently, the operators, which included major mobile operators and infrastructure providers at a meeting with the Minister of Communications, Mr Adebayo Shittu, said such tax would be passed on to subscribers who are already bearing a burden of five per cent Value Added Tax on telecommunications services.

The operators, who spoke through the Chairman of the Association of Licensed Telecommunication Operators of Nigeria (ALTON),  Mr  Gbenga Adebayo,  said “A bill for an Act for the introduction of a nine per cent communications service tax for the imposition, charging and collection of same on communication services is under review at the National Assembly.

“If the bill is passed into law, there shall be an additional tax to end users who currently pay a five per cent as VAT and bringing the total tax on communications users to 14 per cent. This is of further concern, as additional taxes on telecommunications services will adversely impact on the affordability of broadband services.

“Such a tax will also further increase the digital divide with resultant impact on our national broadband objectives. We are very concerned and we have expressed same to all stakeholders to discourage the passage of this bill.”

Last week, the president of NATCOMS, Chief Deolu Ogunbanjo said the association has commenced a massive campaign to compel the lawmakers to abandon the obnoxious bill. Tagged, ‘Nigerians say NO to nine per cent Communications Services Tax Bill ‘, Ogunbanjo said it is a matter of grave concern that the National Assembly could be contemplating such a law at this point in time Nigerians are going through hardship.

“The law, If introduced, such tax will result in an increase in prices for consumers, have adverse impacts on the adoption of mobile services and industry investment and be counter-productive to the longer term national digital strategy objectives set by the government of Nigeria.

“The socio-economic impact of mobile penetration is now widely recognised. According to a research conducted by the World Bank, a 10 per cent increase in mobile broadband penetration in low to middle income countries leads to a 1.38 per cent increase in GDP growth.

“Today, 83 million people in Nigeria have access to mobile services. With over half of the population without a mobile connection, affordability remains a key challenge to connect the unconnected, who are typically lower income population groups. Further taxation on electronic communication services will hit lower income consumers the most, who are already struggling due to the adverse economic situation and increased price pressure and for whom affordable access to information and communication technology is critical to their social and economic inclusion. Moreover, this will result in a double taxation for consumers who already pay Value Added Taxes on telecommunications services,” Ogunbanjo said.