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Stop communication tax debate now!

By Joseph Lowase, Benin City.
25 May 2016   |   2:54 am
Sir: The situation in Nigeria does not call for additional financial pressure on the people. Perhaps no time has been as tough as this for Nigerians.

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Sir: The situation in Nigeria does not call for additional financial pressure on the people. Perhaps no time has been as tough as this for Nigerians.

That is why it comes as a shock that the National Assembly would like to compound the situation of citizens by proposing another tax law through the Communication Service Tax (CST) Bill, now with the two chambers of the National Assembly.

According to the proponents of the Bill, Nigerian telecommunication consumers should be levied 9% in addition to the cost of certain services as service charge and this amount will be remitted every month to the government by the service providers. This additional tax is not a replacement for any of the already applicable taxes on services such as Value Added Tax, instead it is to be paid by the subscriber in addition to VAT charged on services. The CST as it is popularly referred to is targeted at voice calls, SMS, data services, MMS and Pay TV viewing.

The National Assembly needs to be concerned about the negative consequences of another tax law, which is what the CST Bill is all about. Apart from the additional cost that the subscriber will have to pay, the ultimate drop in revenue by the industry operators will be a disincentive for investment in the communication and broadcasting sectors of the economy at a time when Nigeria should be encouraging foreign and local investors to ginger the economy. Over the years, the operators had complained about multiple taxes and fees set by various arms of government, as well as the high costs of doing business.

Despite the phenomenal growth in the telecoms sector with 83 million people in Nigeria having access to mobile telecommunication services, half of the population who are largely low-income earners are yet unconnected to the services. Further taxation through the CST Bill will deal a bigger blow on all the efforts to connect the unconnected and boost their socio-economic status.

The role of government is to improve the lot of its citizens, not to compound it. That is why the National Assembly must resist this bill and stop the debate on the CST Bill now!
Joseph Lowase,
Benin City.

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