The Association of Telecommunications Companies in Nigeria (ATCON) has kicked against reemergence of 9 per cent Communications Service Tax (CST) that was previously suspended by the 8th National Assembly.
According to ATCON, the impact of the adoption of 9 per cent CST bill would amount to a double tax on voice, SMS and data services as 5 per cent VAT already applies on these services.
ATCON President, Olushola Teniola, in a statement to newsmen said “The 9 per cent CST if adopted represents an additional burden when applied to a subscriber base of 173million. If this bill goes through, it would negatively impact Nigerians and foreigners that use these services. The implementation of this CST bill would take the affordability of data services out of the reach of the citizenry. Therefore, ATCON recommends that government reconsiders the passage of the bill, as it would add to the burden of the already suffering Nigerians. It is deemed as an additional multiple tax, loss of revenue to the industry and can lead to loss of jobs in the sector.”
Teniola explained further that during the intervention of ATCON NEC to the Senate President on November 8, 2016, the senators acknowledged that the growth of ICT is critical to the creation of jobs and reduction in youth unemployment.
“The Senate President agreed and assured ATCON and members at large that the tax would be set aside.”
He said ATCON had then recommended to government that the tax base of the country should be widened to include more tax payers. It was noted that only 13 million out 70 million were contributing to the tax revenue of the Federal Government. “Since 2016, Nigeria has under gone a recession and experienced low GDP growth rate coupled with government recurrent expenditure that now exceeds oil revenue. Therefore we understand that measures to shore up government income in the way of taxes should be explored.
However, government needs to also consider a reduction in the cost of governance that will fit within the new revenue generated through taxes and oil receipts.
It is inconceivable that a CST Bill of 9 per cent that was put aside which is a direct copy of Ghana’s CST is now being pushed through the National Assembly without due consultation with all stakeholders and it is especially targeted at the telecoms and ICT sector.
ATCON reiterated that the burden of shoring up government revenue should be across all segments of society in the way other countries use VAT and not to be targeted to a specific sector.