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ATCON carpets CBN on ‘3-minutes call’ tax proposal


Godwin Emefiele

Godwin Emefiele

The telecommunication companies in Nigeria have urged the Federal Government to drop the proposed tax on “three-minutes” calls and above.

The Association of Telecommunication Companies of Nigeria (ATCON) the umbrella body of the Operators, argued that recent present economic policies, of the Federal Government are gradually killing the industry, which is presently contributing about 10 per cent to the country’s Gross Domestic Product (GDP).

‎Mr. Godwin Emefiele, Governor, Central Bank of Nigeria (CBN) had proposed to the federal government to introduce mobile phone call tax.‎
The Governor, who broke the news at the 2016 Annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) held recently in Lagos, said such tax, targeted at the middle, upper class and long phone call makers, can generate N100 billion annually into the federal government coffers.

Speaking on the theme: “Policy options for reversing Nigeria’s economic downturn” he said the country’s economy is currently facing a classical case of “stagflation” and although the 2016 budget is well on track to tackle it, there is need to boost revenue generation base though increased taxes.

He suggested that government could explore opportunities for more revenues to wriggle out of stagflation and recession by introducing a negligible telecom surcharge to be paid by initiator of a telephone call.

“There are several ways we can raise additional revenue to finance the increased expenditure that is needed to engender fast and sustainable growth in the economy. I think we can consider introducing a negligible telecom surcharge to be entirely borne by the initiator of a call. In order to protect the poor and vulnerable amongst us, we could structure it to only take effect after the third minute of talk. Some analyses have indicated that the government could earn about N100 billion per annum from this alone,” he stated.

But, while addressing the press, Mr. Olusola Teniola, president of ATCON, argued, although, the telecom sector is critical to re-engineering the present recession and takes the country out of a possible depression, however, of recent, government policies are haphazard, especially as it concerns investments.

Specifically, the ATCON boss wondered what could have informed the thinking of the Central Bank of Nigeria’s Governor, Mr. Godwin Emefiele to suggest a ‘three-minutes’ surcharge on telecommunications consumers.

Teniola said that the proposal is not only technically wrong; it is also footed on a faulty ground economically.

“How can anyone suggest that government should impose taxes on phone conversations that lasted more than three minutes as an alternative source of revenue?”, he questioned.

He argued that, contrary to the CBN governor’s thinking, it is the poor people who make more calls than the rich, stressing that the proposal is not targeted at the middle or higher class.

He noted that such policy would inadvertently kill the Information and Communication Technology industry, as many investors are already in doubt about the policy direction of the government toward the telecom industry.

Teniola said ATCON has already proposed to the Nigerian Senate a one per cent VAT increase across the board, stating that it is a more realistic measure toward getting more revenue for the government.

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