Disquiet over government’s new communication tax bill

• Private sector, stakeholders urge rethink
• Ministry in consultation, to advise Buhari, says Shittu

Should the planned Communication Service Tax (CST) bill eventually become law in Nigeria, the Federal Government might earn about N20 billion monthly.The Organised Private Sector (OPS), however, has expressed concern over the bill, stressing it would ‎raise the high cost of doing business in the country.

Operators said the economic implications of the bill would affect consumer purchasing power, which they said negates the principle of neutrality, maintaining that it will also discourage investment and impede development of the telecommunications sector.

The Minister of Communications, Adebayo Shittu, in Lagos, yesterday, at a Lagos Chamber of Commerce and Industry (LCCI) forum, disclosed that the bill, which is before the Senate and House of Representatives, had passed its first reading.

The President, LCCI, Dr. Nike Akande, acknowledged the fact that the government is seeking to diversify its revenue base in the light of dwindling oil revenue, but stressed that the private sector players would like to see an investment-friendly tax environment, especially in the light of the prevailing high cost of doing business in the country.

Shituu said that bearing this in mind, he would consult extensively, painstakingly and consistently on the issue and advise President Buhari on the voice of the people as well as the right and best global practices.

He noted that many schools of thought hold that tax will be charged at the rate of nine per cent of fee payable for service and would be borne by the customers.“More so, that the extra tax will be applied on voice calls, SMS, MMS, Data and Pay TV viewing, among other services. Communication service providers will collect this tax from the subscribers and remit to the Federal Inland Revenue Service (FIRS) on a monthly basis.

“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 per cent broadband penetration by 2018 and also undermine the socio-economic progress spurred by increased connectivity. They opine that this, to a large extent, will be a cog in the wheel of implementing the National Broadband plan,” he said.