Communication Tax: Telcos Urge Senate To Reduce Governance Cost
TELECOMS companies on Thursday urged the Senate to cut the cost of governance to fit into the revenues accruable from existing taxes and oil receipts rather than resurrecting the nine per cent Communication Service Tax (CST) which the eight Senate rejected.
Acting under the aegis of Association of Telecoms Companies of Nigeria (ATCON), the carriers urged the Senate to expand the tax net instead of imposing a tax that will further impoverish the people.
Its President, Olushola Teniola, said since 2016, the economy went into recession and experienced low gross domestic product (GDP) growth rate coupled with government recurrent expenditure that now exceeds oil revenue.
Teniola said: “Therefore we understand that measures to shore up government income by 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 government revenue generated through taxes and oil receipts.
“It is inconceivable that a CST of nine 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.
“The impact of the adoption of nine per cent CST is that it is a double tax on voice, text messages and data service as five per cent value added tax (VAT) already applies on these services. This represents an additional burden when applied to a subscriber base of 173million. If the passage of this bill goes through, it would negatively impact Nigerians and foreigners that use these services.”
He said the implementation of this CST would take affordability of data services out of the reach of the citizenry.
“Therefore, ATCON recommends that government reconsiders the passing 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.
“We reiterate that the burden of shoring up government revenue should be across all segments of society in the way other climes use VAT and not to be targeted to a specific sector,” he said.