Recent media reports are making the
round that the Nigerian House of Representatives has begun deliberations on a
proposed legislative law known as the Communication Service Tax Bill. From the
analysis of the Alliance for Affordable Internet, Nigeria Coalition (known as
A4AI), the import of the bill is that over 50 million Nigerians would be
prevented from being able to afford basic broadband connection.
The Bill aims at allowing the government charge communication service users a nine percent (9%) tax on anumber of services which most subscribers or consumers’ use. The proposed nine
per cent tax is to be levied on consumers of communication services will lead
to an additional ten per cent (10%) of the population which is equivalent to
the nearly 20 million Nigerians being unable to Afford a basic broad band plan(source: Tuesday May 17, 2016
of The Punch newspaper edition @page 29).
The A4A1’s analysis suggested that
that the passage of that tax could threaten Nigeria’s ability to achieve its
goal of thirty per cent (30%) broadband penetration by 2018 and thus undermine
the socio-economic progress spurred by increased connectivity. The
Communication Service Tax Bill 2015 will require consumers of voice data, Small
Messaging Service, Media Service and Pay TV services to pay Services to pay
services to pay a nine per cent tax on the fees paid for the use of these
services.
The tax would be collected on top of
the five per cent Value Added Tax that consumers already pay when they purchase
devices and communication services, the twelve per cent custom import duties
paid on ICT devices, and the twenty percent
tax levied on Subscriber Identification Module cards. This then suggests
that consumers will pay for increased operational costs and service fees as
their swervice4 providers will be responsible for collecting the payments and
must fulfill additional reporting obligations.
Based on this analysis, the Communication Service Tax Bill is obnoxious, vexatious and frivolous. In fact,its harmful effects outweigh the good intention of its sponsors. The Bill ought
to be dead on arrival and overtaken by events for the following reasons.
First, communication via internet is
regarded as the most effective way or means thus facilitating commerce and
trade, family relationships, academics. The internet has helped in reducing the high
cost of communication in Nigeria. I recall in the 90s the Nigerian
Telecommunications Network rendered communication services at exorbitant costs
which only the rich could afford. I had no idea how much was charged per minute
but cards were purchased by the NITEL subscribers. But it was not only costly,
it was also fraught with technical hitches which meant that whether the quality
of the service was excellent or otherwise, the consumer has to pay the bills. However,
the advent of the GSM in Nigeria displaced NITEL in 2001 to the extent that as
years passed, NITEL became moribund.
...............REPORTING BY GWD
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