PROPOSED COMMUNICATION SERVICE TAX BILL 2015 (part 2)

PROPOSED COMMUNICATION SERVICE TAX BILL 2015 (part 2)

At the inception of the GSM, Nigerians became exploited and cheated. SIM cards were expensive and difficultto afford due to the fact only two telecom industries MTN and ECONET (nowAIRTEL)  rendered services. The irony of this wonderful package was that Nigerians had no idea as to what extent they were being exploited. They just bought SIM cards and mobile devices on a high rate basis either for calls made or sent text messages. I recall then that it used to be 40 kobo or 50 kobo then. It was at the height of the exploitation by both telecom networks that Glo mobile came on board. The company sold its SIMcards for as low as N1000 which MTN and ECONET sold for between N10000 andN30000. In addition, Globalcom mobile company rendered, quality and affordable services which attracted huge customers thus, forcing its counterparts to make their services affordable. Call charges dropped from 40kobo to 29kobo and thento 15 kobo per second.

Indeed Nigeria has a long way in the history of telecommunications. Now, with the advent of the internet on mobile devices and computer systems, consumers pay less.  Even though data plans seem quite expensivethe cost of GSM services has drastically reduced. The proposed law is obnoxious because it is capable of preventing the common man from using the safest and cost-free means of communication_ the internet. The internet has opened up avenues for people to make a living as far as they are highly computer literate. People have been transformed from rags to riches, raised from grass to grace. Why then, would the law-makers come up with an oppressive bill to throw half the populace into poverty and deprivation?

Second, students in the Ivory Towers will be the worst hit. The management and senate o f higher institutions will be compelled to increase the school fees from the normal amount. Students acrossall institutions pay ICT fees among other fees charged. Hence the school fees will be charged at a high rate making it difficult for students to learn.

In addition, millions of Nigerians would be largely affected in that they would be unable to have access to the internet. Unemployment and mass retrenchment would result. Companies and organizations will be forced to downsize their staff especially where they are unable to pay salaries and allowances. So, the sponsors of this bill do not mean well for consumers who are writhing in pains as a result of the harsh economic situation in the country. It is like pouring salt in injury instead of thinking out solutions to alleviate the plight of the citizens. The bill has afiscal motive_ to generate revenue for the government. When considered on a balanced scale, the effects are better imagined than experienced hence the need to vehemently oppose its passage.

 reporting: GWD

PROPOSED COMMUNICATIONSERVICE TAX BILL 2015(part 1)

PROPOSED COMMUNICATIONSERVICE TAX BILL 2015(part 1)

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