Speaking at a stakeholders’
meeting organised by the
Lagos Chambers of Commerce
and Industry, LCCI, on CST
bill which seeks to levy nine
per cent on subscribers for
the use of the various
communication services,
Shittu said the outcome of
deliberations on the bill
would form the basis of his
advice to the President.
The services include voice
call, SMS, MMS, Data usage
from telecommunication
service providers, internet
service providers and Pay
TV Stations.
He noted that introduction of
new taxes without
harmonising existing ones
would put pressure on the
country’s tax system
thereby making it
unattractive to investors.
According to the
minister”This may also be
counter-productive in the
long run for our targets on
broadband penetration. Our
ICT Roadmap gives fresh
impetus for implementing
existing policies and
reviewing any that is inimical
to the growth of the sector.
My focus on any tax regime
will be to align any process
that will stimulate the
economy and also ensure
that the tax system is
efficient by widening the tax
net. It is also to create an
effective framework for tax
compliance to protect the
poor and vulnerable in the
society who nonetheless
have to use telecoms
services for social inclusion
and financial services.”
He said that the
government’s efforts at
increasing its revenue made
the bill worthy of
consideration.
“I have been reliably
informed that the projected
earnings from this effort is
over N20 billion every
month, which is an attraction
to the government for
funding our budget deficits. I
must be quick to say that
this government has a
human face twined around its
decisions,” Shittu said. The
minister said that the
government would provide
an enabling environment for
the ICT and
telecommunication sector to
thrive through the enactment
of relevant legislation.
Mrs Nike Akande, President
of LCCI called for a friendly
tax environment especially in
view of the difficult business
environment.
“We know that the
government is seeking to
diversify its revenue base in
the light of dwindling oil
revenue. But it is also true
that the private sector
players will like to see an
investment friendly tax
environment, especially in
the light of the prevailing
high cost of doing business
in the country. It is important
to balance these two
positions.”
Mr Bimbo Atilola, Chairman,
LCCI Taxation and
Commercial Law Committee
said that the bill negated the
principle of neutrality in
taxation, as it would affect
consumers’ behaviour
through reduced spending.
He appealed that the
passage of the bill be
suspended to allow for rapid
growth of the telecoms
sector, in line with the
Nigerian National Broadband
Plan.
“If the bill must be passed
into law, NASS should make
the telecoms sector
exempted under VAT Act and
the rate reduced from nine
per cent to five per cent.
There is a need to protect
the ultimate interest of the
final consumers of the
service,” Atilola said.
Mr Taiwo Oyedele, Partner,
PriceWaterCoopers said that
the N20 billion monthly
projected revenue from the
bill was unrealistic and based
on assumption.
According to him, increased
taxation will reduce the
consumption pattern of
consumers, lower investment
in the sector, thereby
translating to reduced
revenue.
Mr Teniola Olusola,
President, Association of
Telecommunications
Companies of Nigeria
(ATCON) said that their
members were overburdened
with multiple taxation.
He urged the government to
discontinue the bill, adding
that it would reduce inflow of
FDI into the sector, reduce
subscribers level of data
consumption and affect
contribution of the sector to
GDP. Engr Gbenga Adebayo,
President, Association of
Licensed Telecommunication
Operators of Nigeria (ALTON)
said that the bill if passed
into law would retard the
growth of the sector.