FG To Introduce 9% Tax On Calls, SMS, Others

Nigerians may have to start paying 9% tax on calls, SMS, PayTV, data and other internet services anytime soon.

This move, according to the Federal Government, is aimed at increasing its revenue so as to fund the budget.

Minister of Communications, Mr Adebayo Shittu, while speaking a stakeholders’ meeting organised by the Lagos Chambers of Commerce and Industry (LCCI) this week, however said this development is being proposed to the government.

He said before this can be implemented, he would need the approval of the President.

“Our ICT Roadmap gives fresh impetus for implementing existing policies and reviewing any that is inimical to the growth of the sector.

“My focus on any tax regime will be to align any process that will stimulate the economy and also ensure that the tax system is efficient by widening the tax net.

“It is also to create an effective framework for tax compliance to protect the poor and vulnerable in the society who nonetheless have to use telecoms services for social inclusion and financial services,” he said at the occasion.

Mr Shittu pointed out that the communication services to be taxed would include voice call, SMS, MMS, Data usage from telecommunication service providers, internet service providers and Pay TV Stations.

The Minister further revealed that when the proposed plan is approved, the government should be making at least N20 billion monthly.

“I have been reliably informed that the projected earnings from this effort is over N20 billion every month, which is an attraction to the government for funding our budget deficits.

“I must be quick to say that this government has a human face twined around its decisions,” said the Minister.

But Mr Taiwo Oyedele, Partner, PriceWaterCoopers disagreed with the Minister on the projected N20 billion monthly from the tax.

He said if the new tax is introduced, consumers would surely reduce their consumption pattern, leading to low revenue for the government.

On her part, President of the LCCI, Mrs Nike Akande, called on the government to create a friendly tax environment so as to allow the industry thrive.

“We know that the government is seeking to diversify its revenue base in the light of dwindling oil revenue. But it is also true that the private sector players will like to see an investment friendly tax environment, especially in the light of the prevailing high cost of doing business in the country. It is important to balance these two positions,” she said.

Also, President of the Association of Telecommunications Companies of Nigeria (ATCON), Mr Teniola Olusola, urged the government to jettison the planned tax increment because he said it will reduce inflow of foreign direct investment into the sector.

He pointed out that players in the sector are already complaining of multiple taxations.