…Says it’s a reflection of danger of one-party legislature
…CST will lead to loss of jobs, revenue to the industry – ATCON
Sequel to the reemergence of Communications Service Tax (CST) bill, after it was dropped in 2016, the National Association of Telecom Consumers (NATCOMS) has described it as something symptomatic of the danger of having a one-party legislature.
President of NATCOMS, Chief Adeolu Ogunbanjo, told our correspondent at the weekend that it was unfortunate that the sponsor, Senator Ali Ndume, brought the bill in 2016 just when Minister Adebayo Shittu was the Communications minister, expressing shock that it was returned because there is now Senate President that is of the All Progressives Congress (APC).
According to Ogunbanjo, on every recharge card that is bought, a five per cent Value Added Tax (VAT) is charged, adding that there is already an array of telecom taxes.
“It’s unfortunate that Senator Ali Ndume brought this bill in 2016 just when Minister Shittu was the Communications Minister.
“He brought it and somehow we opposed it. The industry stood against it. It was dropped. I don’t know why Senator Ndume is now bringing it again.
Is it because it is now Lawan who will now rubber stamp it because they now have an APC man as the Senate President? That is the danger of having a one-party legislature. We will resist it.
“Meanwhile, on every recharge card you buy, there is a five per cent VAT apart from all those other taxes. Already there is an array of telecom taxes.
They now want to introduce communications tax simply because they say it is in Ghana. Even in Uganda, there is communications tax but there is no other tax.
There are so many other taxes- close to 20- in the telecom sector. In other countries, they are looking at bringing the cost of telecom services and data down, you now want to increase it because you have a majority in the house and you have your man as the Senate President,” Ogunbanjo said.
Last week, the bill for an Act to establish communications tax was sponsored by a former Senate Leader, Ali Ndume. The bill stipulates that tax shall be levied on electronic communications services like voice calls, SMS, MMS, data usage – both from telecommunications service providers and internet service, as well as pay per view TV stations.
In his reaction, President, Association of Telecommunications Companies of Nigeria ( ATCON), Mr. Olusola Teniola, said it was inconceivable that a CST bill of nine per cent that was put aside, which is a direct copy of Ghana’s CST, is now being pushed through the National Assembly without due consultations with all stakeholders.
Corroborating the position of Ogunbanjo, Teniola said the impact of the adoption of nine per cent CST bill is that it is a double tax on voice, SMS and data services as five per cent VAT already apply on these services, noting that it represents another burden when applied to the subscriber base of 173 million.
According to Teniola, the implementation of the CST bill would take affordability of data services out of the reach of the citizenry, urging the relevant authorities to reconsider passing the bill as it would add to the burden of Nigerians because it is deemed as an additional multiple taxes, loss of revenue to the industry and can lead to loss of jobs in the sector.
He, however, expressed the need for the government to consider a reduction in the cost of governance that will fit within the new government revenue generated through taxes and oil receipts.