Angry Nigerians Reject New Tax on Phone Calls, Pay Tv

Nigerians have reacted angrily to the proposed communications service tax describing it as another way of exploiting the struggling consumers.

Nigeria CommunicationsWeek had earlier this month reported that communication service subscribers may pay additional tax if a new Bill now being introduced by the National Assembly is enacted into law.

The categories of communication services liable to the tax include voice calls, SMS, MMS, Data and Pay TV.

But ThisDay which spoke to a number of Nigerians reported the subscribers have vowed to reject the tax.

Abimbola Akanbi, a subscriber told the newspaper that the development was one which sought to stifle communications and impose further hardship on poor subscribers.

Akanbi who urged the government to seek other alternative ways to generate revenue said such bills if passed into law may bring about double taxation as the phone companies would hike their charges as a result of the cost they would incur in complying with the law and filing returns.

Another subscriber Chidi Obinna, said the government had indirectly chosen another way to revive the social media bill.

"The implication of this is that Nigerians will have to pay more for communications services including data bundle to access social media. Should we pay more for these services, then there will be limit to how we visit these platforms because of fear of exorbitant charges."

Also reacting, The Association of Telecommunications Companies of Nigeria (ATCON) said the bill should not be made to stand considering the inconvenience it would foist on subscribers.

According to Ajibola Olude, executive secretary of ATCON,  "Already, Nigerians are complaining of economy hardship, imposing another tax on them will add to their burden and in effect, reduce communications growth.

"As far as we acknowledge that it is a trying period for the economy, that is not to say that we should transfer the burden on consumers who are also strongly affected by the harsh economy status. Already, subscribers are already paying high for telecommunications services compared to what is obtainable in other countries. Asides this, telecommunication business will be largely affected because subscribers will reduce their interaction with telecommunications services and in turn affect the overall profits of service providers." Olude noted.

Nigeria CommunicationsWeek had earlier reported a Bill, titled ‘Communication Service Tax Bill (“CST” or the “Bill”) 2015’, seeks to impose, charge and collect Communication Service Tax (CST) and will be levied on service fees payable by users of electronic communication services at 9% and will be borne by the customers.

The rate of the CST, which is proposed at 9 per cent of the service charge for the use of communication service charged by service providers, is seen by fiscal experts as amongst other taxes being imposed by government to shore up its revenue base as the whirlwinds in the international oil market continue its depreciative impact on accruable earnings by the country from crude oil exports.

According to a ‘Tax Alert’ publication by PricewaterHouseCoopers (PwC), Nigeria, if the Bill is enacted into law, it will mandate service providers to file monthly tax returns with the FIRS with strict penalties for non-compliance.

For instance, Section 2 of the Bill listed the chargeable services to include, Voice calls, SMS, MMS, Pay per View TV stations, data usage from telecommunication services providers and internet service providers.

While the Federal Inland Revenue Service (FIRS) will be responsible for the collection of the tax and its payment together with any interest and penalty into the Federation Account, the Federal Government will be responsible for the administration and management of the funds.

The Bill provided that all service providers are to file tax returns and pay the tax due not later than the last working day of the month immediately after the month to which the payment relates. Failure to comply with this provision will attract stiff financial penalties on erring entities