ALTON cautions FG on introduction of Communications Tax

Association of Licensed Telecommunications Operators of Nigeria (ALTON) has cautioned federal government over the move to introduce communications tax saying that it will amount to double taxation.

According to a statement signed by Gbolahan Awonuga, executive secretary of the Association ‘the introduction and collection of the tax without the exclusion of the applicability of the Value Added Tax (“VAT”) which was introduced by the Value Added Tax Act and is also applicable to services rendered by service providers in the telecommunication sector, will amount to double taxation as the proposed tax is an additional tax on communication services rendered to the same end users who already pay a five percent (5%) tax as VAT.’

ALTON further said that the administration of this tax regime as proposed will be cumbersome and impractical.

“We must correct this general notion that service providers can absolve any tax without considering the capital and operational cost to the service providers.”

The statement noted that high consumer taxes on communication services would impact negatively on economic and broadband development.

“Today the country has more than 83 million unique subscribers, accounting for 45 per cent of the population. As well as providing access to financial services, Education and Healthcare to millions of citizens, many for the first time, telecoms has also played a critical role in reducing transportation, communication and transaction costs. Pushing up the cost to consumers, this tax will inevitably adversely impact the adoption of broadband affordability which is a key challenge in connecting the unconnected.