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Experts oppose FG’s move to tax voice calls, pay TV

By Onyedika Agbedo
26 March 2016   |   12:58 am
Marketing Communication experts have condemned the proposed communications tax bill before the Eight National Assembly, describing the bill as evidence that the Federal Government “isn’t sensitive to the plight of the people”.
Minister of Finance, Mrs Kemi Adeosun

Minister of Finance, Mrs Kemi Adeosun

Urge Provision Of Basic Infrastructure

Marketing Communication experts have condemned the proposed communications tax bill before the Eight National Assembly, describing the bill as evidence that the Federal Government “isn’t sensitive to the plight of the people”.

If the proposed communications tax bill is passed to law, telecoms subscribers in Nigeria may be facing tougher times in the months ahead. The bill, entitled ‘Communication Service Tax Bill (“CST” or the “Bill”) 2015’, seeks to enforce, charge and collect communication service tax (CST) on all electronic communication services at nine per cent which will be borne by subscribers.

Subscribers’ data released monthly by the telecoms industry regulator, Nigerian Communications Commission (NCC) and the current industry’s Average Revenue Per User (ARPU) provided by the operators, indicated that the Federal Government may be reaping over N20 billion monthly from Nigerian subscribers if the bill is enacted into law.

The categories of communication services liable to the tax include voice calls, SMS, MMS, Data and Pay TV. For instance, Section 2 of the bill listed the chargeable services to include voice calls, SMS, MMS, pay per view TV stations, data usage from telecommunication services providers and internet service providers.

While the Federal Inland Revenue Service (FIRS) will be responsible for the collection of the tax and its payment together with any interest and penalty into the Federation Account, the Federal Government will be responsible for the administration and management of the funds.

The bill provides that all service providers are to file tax returns and pay the tax due not later than the last working day of the month immediately after the month to which the payment relates. Failure to comply with this provision will attract stiff financial penalties on erring entities.

The bill, proposed by the government last month and currently being reviewed by the National Assembly, would see consumers of data, voice, SMS, MMS and pay-TV services hit with a nine per cent tax levied on service fees.

Reports suggest the government wants to impose this to offset the effects of falling crude oil prices globally.Commenting on the issue, the Managing Director of Absolute PR, Mr. Akonte Ekine, imposing multi-taxation in the information and telecommunications industry is unfair, noting that the present economic situation of the country is really biting hard on the people and the government should seek other alternative ways to generate revenue.

The Public Relations practitioner said: “Every way the government wants to generate money is good but imposing multi-taxation on voice calls, data and SMS is quite unfair to the people. It indicates the government doesn’t care about her people. The government isn’t sensitive to our plight. People are struggling for electricity, good water, food, motorable roads and other basic amenities. The electricity tariff, which was recently increased, and now the proposed communications tax bill reviewed by the Eight National Assembly will only evoke more economic challenge on the people. Personally, I’m not happy with this.”

Executive Creative Director and Chief Executive Officer of Noah’s Ark, Mr. Lanre Adisa while lending its voice on the issue, pleaded with the Federal Government to look for ways of diversifying the economy by providing constant power supply and empowering the Small and Medium Scale Entrepreneurs (SMSEs) rather than further inflicting hardship on the people through voice calls and pay TV tax.

His words: “Really, there are so many things the government could do to generate more revenue as we all agree it’s time to diversify the economy. But the expectation of the people is to have basic facilities that will enable them to contribute to the growth of the country and also pay their taxes. The Federal Government can help fund SMEs which could help reduce unemployment, generate more money through taxation and also boost our GNP and GDP. The government should listen to the yearnings of the people.”

To Mrs. Aina Ololade, an Integrated Marketing Communications (IMC) consultant “the economies of developed countries are underpinned by information and communication technology. The growth of Nigeria in the last decade is driven by ICT, agriculture and services and the Federal Government should focus on sustaining the growth in these sectors.”

She also opined that the information and communication technology sector of the country has arguably been the only sector that has provided a lot of opportunities for youths in the last decade and should be given more support from the Federal Government rather than being stifled through taxation.