ATCON asks FG to peg communications tax at 1%

Association of Telecommunication Companies of Nigeria (ATCON), has asked the national assembly to peg its proposed communication tax at 1% instead of its 9% plan.

The association while admitting that government’s desire to widen her tax net was commendable, however rejected the proposed 9% tax.
Olusola Teniola, president of ATCON, on a letter to Bukola Saraki, President of the Senate said that “We, therefore, suggest that an increase in VAT tax, which is already included in all services of telecommunications by an increase that is not beyond one percent should be a good reform strategy,” t

“The projections are that a new tax on the ICT services as high as nine percent that is being proposed will result in excluding 10 percent of the population, that is talking of about 20 million Nigerians from access; whereas, the survival of our economy is on attracting more citizens to have access to Internet and therefore ICT services. It does not add up if whatever we do ends up not bringing more people into access.

“The reality of Internet access in Nigeria is that it is all about mobile. Only about 13 percent of Nigerians get broadband access via mobile while less than one percent of the people do from fixed services.”

Operators argued that the tax would further upset Nigeria’s internet adoption rate which they said is low due to the high cost of data in the country.

“In Nigeria, the average income in 2014 was $2970 (GNI per capita, source: World Bank), 40 percent of the population actually earned less than half that amount. In practice, this means that a 500MB mobile Internet plan priced at 5.4 percent of average monthly income actually costs the majority of Nigerians anywhere between seven percent and 18 percent of monthly income,” the operators said.

“No doubt, there is severe pressure at this time and government revenue cannot be different. We, however, pray that the template with which the telecoms industry is viewed and assessed be slightly modified.”