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Telcos worried over 9% communications tax plan in Nigeria

Telcos worried over 9% communications tax plan in Nigeria

Nigerian telecoms companies have protested the return of a suspended legislative move to impose a 9% communications services tax in the country.

Plans to impose the 9% Communications Service Tax (CST) was suspended by the 8th National Assembly but has resurfaced, the Association of Telecommunications Companies of Nigeria (ATCON) says Thursday in a statement made available to Technology Times

Olusola Teniola, President, ATCON, says that rather than bring back the plan, “government needs to also consider a reduction in the cost of governance that will fit within the new government revenue generated through taxes and oil receipts.” 

The telecoms pressure group warns Nigeria against going the way of Ghana where a new 9% tax was imposed on subscribers of electronic communication services following an increase from 6%.

ATCON President says “it is inconceivable that a CST Bill of 9% that was put aside, which is a direct copy of Ghana’s CST is now being pushed through the National Assembly without due consultation with all stakeholders and it is especially targeted at the telecoms and ICT sector.”

Teniola says that “the impact of the adoption of 9% CST bill is that it is a double tax on voice, sms and data service as 5% VAT already applies on these services. This represents an additional burden when applied to a subscriber base of 173 million.” 

ATCON says that “if the passage of this bill goes through, it would negatively impact Nigerians and foreigners that use these services. The implementation of this CST bill would take the affordability of data services out of the reach of the citizenry.” 

ATCON suggests that “government reconsiders the passing of the bill, as it would add to the burden of the already suffering Nigerians. It is deemed as an additional  multiple tax, loss of revenue to the industry and can lead to loss of jobs in the sector.

According to Teniola, the telecoms group engaged with the 8th National Assembly when the tax plans became known to underscore its impact on information and communication technology (ICT) growth in Nigeria.

Teniola says that the group has become aware of “reemergence of 9% Communications Service Tax (CST) that was previously suspended by the 8th National Assembly during the intervention of ATCON NEC to the Senate President on Thursday, November 3, 2016 whereby it was acknowledged by the distinguished Senators that the growth of ICT is critical to the creation of jobs and reduction in youth unemployment.” 

According to him, “The Senate President agreed and assured ATCON and members at large that the tax would be set aside. In attendance at the meeting were Rt Hon. Bukola Saraki, Senate President of the 8th National Assembly, then Chairman and Vice Chairman of the Senate Committee on Communication, Senator Gilbert Nnaji and Senator Solomon Adeola Olamilekan respectively.”

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