More reactions have continued to trail the 9% planned introduction of communication tax by the federal government on telecommunication operators. The communication tax bill, which is a private member bill, seeks to impose and collect levies on every service consumers of electronic communication services in Nigeria enjoy.
The bill, which has scaled first reading in the House of Representatives, has been received with varying degree of reactions particularly from consumers who believe that government is putting additional burden on the people by introducing such a bill. At a recent interactive forum held in Lagos, many consumers who spoke on the bill said government should not toy with the idea as it was likely going to compound their economic woes and put a serious lean on their purse if implemented.
The Nigeria Labour Congress, NLC, had at a press conference recently, which followed shortly after a mass protest on the bill, demanded that government rescinds its decision by ensuring that the bill is withdrawn. Also speaking, the National President of Telecom subscribers and a right activist, Chief Deolu Ogunbanjo, said the proposed communication tax bill was bound to make life unbearable for Nigerians.
He said: “The proposed communication tax bill is going to bring untold hardship on Nigerians. Any increase in telecommunication operators will not augur well for telecom subscribers. This is because when government introduces 9% on the telecom operators, the operators are certainly going to transfer the 9% cost or more to the subscribers or consumers. Again as we speak, there are so many taxes numbering 26 that affect the Nigerian subscribers. Some of them include taxes on handsets, taxes on Sim cards, Value Added Tax (VAT) and so on. Besides, some states collect money from the operators likewise the local government which collect all sort of levies.
In Lagos state for example, the government used to collect N3000 per metre on any cable dug on the road until the intervention of National Communication Commission when it was reduced to N500. But in some states, it is far higher than that. We also have Cybercrime Prohibition Tax which is about 0.5%.
If you look at our young minds who are developing applications, you would know why it is important to have high broadband. This is because you cannot do this without having broadband. At the moment, Nigeria can only boast of 13 or 14% broadband penetration and we are hoping to get to 30% by 2018. So, do you think that is achievable if we are hiking telecommunication services through taxation? The answer to me is no. You would recall that NCC posted on its website where it stated that internet users had reduced by 5%. So, if we allow another taxation, are we not going to shut out a good number of users. Currently, the highest employer of labour in the country still remains the telecommunication industry. So, I am not sure this would help if allowed to come through.”
One of the consumers who spoke with our correspondent, Mr. Adebayo Adeosun, an engineer, said government may not be acting wisely by putting such a bill before the National assembly considering the fact that the hardship being faced by Nigerians on its own, is something that has become highly unbearable at this time. According to him, the idea of boosting revenue through communication was not well thought out. Rather than government imposing levies on operators that are likely going to be transferred to consumers, government can decide to look inward and block all leakages to rev up their revenue.
He said: “I don’t know who the advisers of this present administration are. I am amazed that someone is introducing such a bill when many Nigerians are already pushed to the limit because of the economic hardship. I think other avenues should have been looked at instead of government relying on communication. Apart from that, there are many leakages which government ought to block to rev up the revenue. This is not the best time to moot the idea because consumers alone are still burdened with managing economically. You must also know that consumers pay value added tax, so asking them to be levied again is way too much.”
Another commentator, Mr. Ifeanyi Obiozor, an accountant and entrepreneur, said he is surprised that government does not know the implication of this decision to many starts-up. To him, adding more in form of taxation on some of these services being rendered by operators is going to affect business growth. Ifeanyi, who stated that the timing was wrong, said such action may compound the survival of many businesses especially in environment like Nigeria where study showed that ease of doing business was still very low.
Another commentator, Mrs. Khadijah Ibrahim, bemoaned the federal government for even tinkering with the idea, saying that such tax may have shown that the leadership in the country lack empathy for the people. Khadija said at a time when cost of living is increasingly becoming high, introducing another round of taxation on the populace may give them little hope about the country and elicit distrust about the sincerity of the administration to turn their fortunes around.
She said: “I am at a loss with this administration if what it is considering is to introduce telecommunication tax. We are saying that things are hard and yet you are bringing additional heavy burden on the people. Why is it that government is not always considerate of the plight of the people in this part of the world? I am confused, I don’t think this government is sure of giving us any hope.
Corroborating the position held by other commentators, Bisi Adeloye, a fashion designer, said it is highly surprising that government can be contemplating boosting its revenue by introducing taxes on people even when the subscribers are not enjoying good services from their various operators. To her, taxes can only be justified if government creates enabling environment and the necessary infrastructure that would guarantee good services.
She said: “What is this communication tax all about if government is not doing what is right by creating the environment to boost business growth. As we speak, services from the various operators are at their lowest ebbs and yet government is talking about introducing another tax. I don’t think they are serious at all. There is no electricity, there is insecurity and now you are saying we should pay more. Government should do the needful by getting our infrastructure to work such that operating expenses by the operators would be lesser. I believe if that is done, government can have every reason to raise taxes.”