Economy & Trends
Communications Tax: Global Body Rejects FG’s 9% Proposal
- By: Maktoub Magazine
- October 24, 2016
Economy & Trends
The GSM Association (GSMA), a global association of mobile operators, has rejected the 9% tax proposed in the Communications Service Tax Bill before the federal lawmakers in Nigeria.
The tax would be charged at the rate of nine percent of the fees payable for the service and will be borne by the customers. The extra tax would be applied on voice calls, SMS, MMS, Data and Pay TV viewing, among other services. Service providers would collect this tax from the subscribers and remit to the Federal Inland Revenue Service on a monthly basis.
But the mobile industry pressure groups, yesterday, said the proposed law would adversely impact on the digital development of Nigeria.
In a report titled: “High consumer taxes on mobile could hold back Nigerian economic and digital development,” the GSMA said that the tax would negatively affect the mobile adoption of Nigerians.
“If mobile is going to reach its potential for development in Nigeria, supportive policies that increase digital inclusion and drive even greater growth are needed,” it said. “For these reasons the GSMA, along with other industry organizations including ALTON, ATCON and NATCOMS, has rejected the Nigerian government’s proposed ‘Communication Service Tax’ that would establish a nine per cent tax on users of services such as SMS, voice calls, MMS and data. By pushing up the cost to consumers, this tax will inevitably adversely impact the adoption of mobile.”
The association maintained that taxing electronic communication services would hit lower income consumers the hardest, making access to mobile even less of possibile. “It is these consumers and communities that stand to gain the most from the social and economic inclusion that access to mobile provides,” it said.