Nahimah Ajikanle Nurudeen
The Association of Telecommunications Companies of Nigeria (ATCON) has again cautioned the Federal Government on the proposed 9per cent Communication Service Tax Bill (CST, saying that the move is a dangerous signal to the implementation of the National Broadband Plan.
ATCON President, Olusola Teniola during a visit to President of the Senate, Dr. Bukola Saraki maintained that the planned telecoms sector tax will only succeed in worsening the prevailing high cost of doing business in the country.
He said another tax on every phone call made, text message sent and data used by Nigerians will amount to double taxation because Value Added Tax (VAT) Act already imposes tax of five per cent on the supply of goods and services.
He called for the suspension of the bill to allow for the rapid growth of the telecommunications sector in line with the Nigerian National Broadband Plan.
Teniola stated that while ATCON appreciates severe pressure to increase government revenue at this time, the group asks for a reconsideration of the CST Bill and recommend, as an alternative, “a tax reform that increases the current VAT by a new 1% added for the purpose of development of communications. Another alternative is that the tax being proposed in the Bill be limited to 0.2%.”
According to him, introduction of a new tax on ICT services as high as 9per cent will exclude 10per cent of the population, about 20 million Nigerians from access to telecoms services.
He noted that the survival of the nation’s economy is on attracting more citizens access to the internet and ICT services.
Teniola stated that one of the main reasons the rate of Internet adoption and use is rather slow in Nigeria is the high cost of data subscription.
He said, “In 2013, we planned to achieve 30% broadband penetration by 2018. Current access figure is clearly some way off this target and needs measures to boost growth in usage. A sharp rise in tax as being proposed in the CST will achieve the exact opposite of our desire.
Our mandate is to support the Federal Government to succeed in attracting and protecting investments in the telecommunications industry and to make meaningful input to all aspects of economic development including legislation and management of our industry so it continues to be the oil of growth and development.”
Responding to the ATCON’s President position, Senate President of Nigeria, Dr. Bukola Saraki, said the senate is committed to making laws that would get the economy going adding, that the telecom sector is critical to Nigeria economy.
He said, “As a result of that the senate would never make laws that would push the sector to negative performance rather they would make laws that would increase the performance of the sector so that the sector generates more revenue and employment for the country therefore the senate would continue to make laws that would accelerate its growth.”
He also wanted the telecom sector to take the issue of corporate social responsibility more seriously.
He said it was only organized private sector like ATCON that can get Nigeria out of recession therefore the senate would not make laws that affect its negatively.
He therefore promised the president of ATCON that Senate would continue to legislate laws that would attract more investment to the sector and vowed to remove any hindrance that might want to slow the growth of telecom industry in Nigeria.
