Minister fears proposed ICT tax bill may harm sector

Barrister Adebayo Shittu, Minister of Communications, has called on stakeholders in the communications sector to discuss the proposed Communications Tax Bill to avoid scaring investors.

Shittu added that “this is necessary in order to weigh the effects of the proposed tax regime on the government, stakeholders as well as end users of communication services.”

He called for a juxtaposition of new tax regime with existing ones saying that the introduction of new taxes without harmonizing existing ones will put pressure on the Nigerian tax system, thereby making it unattractive to investors and may consequently be counter-productive in the long run for the nation’s targets on broadband penetration.

Shittu who spoke extensively on controversies surrounding the proposed bill, said a section of the stakeholders have extrapolated that the Bill seeks to impose additional nine per cent charges on users of electronic communication services which is to be remitted to the Federal Inland Revenue Service on a monthly basis; more so that the extra tax will be applied on voice calls, SMS, MMS, Data and Pay TV viewing, among other services.

The Minister said others have posited that over 60 million Nigerians would be unable to afford basic broadband connection, a situation that is likely to threaten Nigeria’s ability to achieve its goal of 30% broadband penetration by 2018 and also undermine the socio-economic progress spurred by increased connectivity.

“This to a large extent will be a cog in the wheel of implementing the National Broadband plan,” he aligned with the industry stakeholders’ views.

He added that many have also concluded that the proposed Bill will also discourage further investment in the communication industry due to reduced Returns on Investment, and ultimately drastically reduce the sector’s huge contributions to the national GDP. Some have concluded that the proposed CST Bill is an ill wind that would blow the country no good.

“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 and creating an effective framework for tax compliance to protect the poor and vulnerable in the society who nonetheless have to use telecom services for social inclusion and financial services among others.