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‘New VAT hike may limit telephony access to 90m Nigerians’

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The Federal Government’s 7.5 per cent new Value Added Tax (VAT) increment on goods and services may limit telephony access of some 90 million Nigerians estimated to be below the poverty line in the country.

This was the position of the Association of Telecommunications Companies of Nigeria (ATCON) as the increment has been enforced on telephony services in the country.

Already, the Nigerian Communications Commission (NCC) has said that some 35 million Nigerians in some 195 communities and towns in the country are currently without any form of telephony access.

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Currently, checks have shown that SMS, which usually cost N4.00, is now N4.10 for 160 characters. Same goes for calls and data services, as the prices are under review across board and new prices may emerge from next week, The Guardian learnt.

But the President of ATCON, Olusola Teniola, while speaking at a televised programme yesterday, monitored by The Guardian, said that the focus of the service providers had always been to ensure that subscribers have access to cheaper services, both calls and data.

Teniola said that since the last recession the country witnessed, the Federal Government had practically been struggling to balance its budget, which has constantly been in deficit.

He said the plan was to introduce sector specific tax, adding: “I mean there was clamour by the National Assembly to either bring on a nine per cent Communication Service Tax (CST) on the sector, though remains a subject of hot debate, or an overall tax increase of 50 per cent, that is from five per cent to 7.5 per cent. The latter was later adopted by the Federal Government. This means that from February 1, all calls, Internet calls, data services, SMS will now have a charge of 7.5 per cent tax.

“But I must say this, the objective of the telecoms sector is to have a cheaper telephony services. Despite the increment, we are still looking for every means to ensure prices are reduced.”

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Meanwhile, in a document jointly signed by Chairman of ALTON, Gbenga Adebayo and Head of Operations, Gbolahan Awonuga, the body said purchases of telecommunication products and services would be affected by the implementation of the VAT increase.

ALTON said the VAT increase would reflect on the charges of phone calls, text messages and data for Internet in Nigeria.It said: “Further to the assent of the Finance Bill by President Muhammadu Buhari, which reviewed the Value Added Tax from five per cent to 7.5 per cent, ALTON wishes to notify consumers that our members will begin applying the new rate on all purchased telecommunication products and services with effect from February 1, 2020.”

ALTON, however, gave the assurance that its members will adhere to tariff transparency and quality service delivery in implementing the VAT increase.

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