Ife Ogunfuwa and Tunde Ajaja



Telecom subscribers in the country are likely to pay an additional N 261 . 18 bn on voice calls , short message service and data in one year if the Senate passes the proposed Communications Service Bill into law .

The bill , sponsored by Senator Ali Ndume from Borno South , aims to charge nine per cent on communication services and pay - per -view TV services .

Ndume noted that the bill , which had passed the first reading at the upper chamber of the National Assembly , would impose levies on electronic communication services like voice calls , SMS , data usage – both from telecommunication services providers and Internet service providers and pay -per - view TV services .

Meanwhile, network operators under the aegis of the Association of Licensed Telecommunications Operators of Nigeria pointed out that the proposed nine per cent tax would make communication expensive and in turn make life difficult for the average Nigerians .

The Chairman of ALTON, Gbenga Adebayo, said communication was presently one of the most affordable basic needs of Nigerians but cautioned that the proposed increase was offensive and would make it inaccessible to many .

In fact , the bill specifically stipulated that the subscribers would be liable for the payment of the tax .

Section 2 of the bill reads , “ The tax shall be paid together with the Electronic Communication Service charge payable to the service provider by the consumer of the service .

“ The tax is due and payable on any supply of Electronic Communication Service within the time period specified under sub -clause ( 5 ) of whether or not the person making the supply is permitted or authorised to provide Electronic Communication Services .”

The latest monthly subscribers ’ data obtained from the Nigerian Communications Commission indicated that the number of active subscribers to mobile services in Nigeria through the four network operators stood at 176 .62 million as of August 2019 .

MTN leads the industry with 65 .71 million active subscribers , followed by Airtel with 47 . 92 million , Globacom has 47 .27 million , 9 mobile has 15 .6 million and Visafone spectrum owned by MTN has 119 ,386 customers.

According to the data obtained from the NCC , in the year ended December 2018 , the total outgoing mobile -to -mobile minutes of calls from MTN , Globacom, Airtel , 9 mobile , Smile and Ntel was 114 .20 billion minutes .
SUNDAY PUNCH ’s analysis , however , showed that at an average of N 24 per minute , offered by the network operators , subscribers in the country spent N 2 . 74 tn on calls within one year .

But, with an additional nine per cent tax on voice calls , if the bill is passed into law , subscribers may have to spend about N 246 .67 bn more on voice calls only, because according to analysts , operators would eventually pass the increase to the final consumers.

The analysis showed that MTN subscribers may have to pay N 29 . 43 as against N 27 / min ; 9 mobile subscribers may have to pay N 32 .7 / min as against N 30 / min ; Airtel users may have to pay N 32 . 7 as against N 30 / min , and Glo subscribers may have to pay N 7 .2 / min as against N 6 . 6 / min .

The 2018 industry data from the NCC showed that the total volume of SMS sent in the year ended December 2018 was 9 ,565 , 167, 407 , which implied that subscribers paid N 38 .26 bn for SMS in the 12 months , at N 4 per SMS .

With an additional nine per cent tax on SMS , subscribers will spend about N 3. 44 bn more on messages as the unit cost of SMS could rise to N 4 .36 to enable network operators to remit the nine per cent tax to the government .

Also, NCC statistics showed the total number of international SMS sent through the four mobile network operators , including Smile and Ntel , in the previous year was 51 ,534 , 609.

At N 15 / international SMS , subscribers , therefore , spent N 773 .02 m . Thus , if the nine per cent tax is imposed on international SMS , subscribers are likely to pay N 69 .57 m more as the tariff could rise to N 16 . 35 per international SMS .

Industry data also indicated that 188 ,012 , 210 outgoing mobile roaming minutes were recorded in the previous year , at an average of N 288 per minute , which was responsible for the N 54 . 15 bn subscribers spent on roaming the previous year .

With a nine per cent tax , the international call tariff may rise to an average of N 314 per minute to make allowance for the nine per cent tax the network operators would remit to the government . Thus , subscribers may likely spend about N 4 . 87 bn more on international calls .

In terms of data , the total volume of data consumed by subscribers in the year ended December 2018 was 68 ,154 . 12 terabytes . This indicated that subscribers spent N 68 .15 bn on data services last year , at an average of N 1, 000 per gigabyte of data .

Thus , if the proposed nine per cent tax is implemented, subscribers would pay additional N 6 .13 bn , on data .

As of August 2019 , the telecom industry has a total of 122 . 59 million active mobile Internet users from the four mobile network operators .
MTN also leads with 51 .6 million Internet users, followed by Airtel with 32 .75 million Internet subscribers . Globacom has 29 . 52 million mobile Internet customers on its network ; 9 mobile has 8 .63 million while subscribers on Visafone spectrum belonging to MTN amounted to 83 ,482 .


Operators react

Speaking on the planned increase , the ALTON chairman said , “ The bill is badly intended for the industry at a time when we are talking about the availability and accessibility to telecom services .
“ If that bill is allowed to be passed into law , it will deny people access to these services and reduce the value of their recharge. Also, the terms of the bill , which we haven ’t seen , may lead to significant compromise of people ’s privacy because the way by which the collection of the money will be made may require the government to have access to the servers of the operators . ”

Adebayo, therefore , called on the Senate to reconsider the proposed tax , adding that it was contrary to the purpose for which they were elected to office.

The President , Association of Telecommunications Companies of Nigeria , Olusola Teniola , also urged the government to consider a reduction in the cost of governance , instead of imposing the tax .

He expressed concern that the CST Bill , which was copied from Ghana, was being promoted at the National Assembly without due consultation with all stakeholders in the telecom and ICT sectors .

He said, “ The levy will be either inclusive of the tariff or it will be added on every recharge. It will also apply to subscribers of pay -per -view TV . This tax will have a serious impact on spending because the people who ordinarily have been able to afford services will no longer be able to because it will be more expensive .

“ It will have a ripple effect on the economy, Gross Domestic Product and telecom revenue . Productivity will reduce because it will be more expensive to make calls and enjoy other communication services . Nigeria has one of the highest numbers of taxes paid . This is just another additional burden on consumers. It is totally wrong. ”

Speaking on the impact on the subscribers , the President , National Association of Telecoms Subscribers , Chief Adeolu Ogunbanjo, condemned the proposed tax , noting that it would impoverish more Nigerians and increase the rate of unemployment in the country .
He said, “ It will impoverish Nigerians . Did you know that on every recharge card that you buy , you pay five per cent Value Added Tax on it already?

“ There are so many taxes being paid by the telecom companies . These taxes are about N 450 bn annually, apart from the VAT. Why does anyone in Nigeria want to introduce additional taxes in a sector that is bedevilled by multiple taxes ?”

Also speaking on the bill , The President , Nigerian Association of Chambers of Commerce , Industry , Mines and Agriculture, Alhaja Saratu Aliyu, said even though the association understood government ’ s need to boost internally generated revenue to fund the budget, the economic growth rate was still too fragile .

She added , “ Government should abstain from any policy that will negatively affect the production capacity of the economy at the risk of another recession . It is our position that an increase in tax rate ( VAT , communication or otherwise) will negatively impact cost of production , price levels and consumption levels.
“ We advocate that all policies to increase IGR be focused on widening the tax net or increasing the tax base, increasing production by increasing employment while maintaining current tax rates . We advocate that all policies to increase IGR be focused on widening the tax net as being done by the FIRS .”


Why tax bill is essential – Senate

Ndume had said the bill was to provide for Communication Service Tax as a veritable tool for economic diversification and for related matters .

Speaking to journalists during the week , he said the tax would encourage wealth distribution in ways that would not affect the ordinary citizens, noting that the proposed increase in Value Added Tax by the government would have a negative effect on the economy as it would not only affect the prices of goods and services but take them beyond the reach of the common man.

Meanwhile, section 1 of the bill reads , “ There shall be imposed , charged , payable and collected a monthly Communication Service Tax to be levied on charges payable by a user of an Electronic Communication Service other than private Electronic Communication Services.

“ The tax shall be levied on Electronic Communication Services supplied by service providers . For the purpose of this clause , the supply of any form of recharges shall be considered as a charge for usage of Electronic Communication Service .

“ The tax shall be levied on the following Electronic Communication Services : ( a ) Voice Calls ; ( b ) SMS ; ( c) MMS ; ( d ) Data usage both from Telecommunication Services Providers and Internet Service Providers ; ( e) Pay -per - View TV stations , etc . ”

https://punchng.com/gsm-tax-mtn-glo-airtel-9mobile-subscribers-others-to-pay-extra-n261bn/


lalasticlala

We don finally enter one chance.

Government is planning to tax us for using data, so as the network providers. Make Dem kuku kill us now..

Meanwhile, it is only in Nigeria unlimited data bundles expired before 25th

really


Anyway, is your laptop faulty, non functioning, need upgrade or maintenance? Do you need I.T Support? Dont worry, we gat you. Check my signature for contact details

In a Sane Clim Buhari wouldn't rule for second them, the announcement of his second term victory would have led to serous protests across the country buh here in Nigeria anything her govt foist on us we will just sit and fold our harms and watch them toil with our emotions.

By the time this APC govt is true with Nigeria, we'll all know it's a negative change we voted for.

We never chi chomting.

Anything concerning next level, i am pleased afterall baba told us to get ready for hard times.. buhari till 2027

This next level go sweet sha. Sarki how far

[s]

helinues:
Government is planning to tax us for using data, so as the network providers. Make Dem kuku kill us now..

Meanwhile, it is only in Nigeria unlimited data bundles expired before 25th

[/s]


stop that two faced talk, this is the govt you supported despite its anti human policies


Buhari is a total failure, the illiterate had turned democracy to full military regime with his misplace priorities of governance



thunder need to end that madness in Asorock before 2023, I doubt if Nigerians can survive that dude incompetency before his tenure elapsed

Haba

Make them go prepare for massive hacking of their systems.. Nonsense and buhari.

The youths are clamouring for Tasha and other BBN

Tax on services rendered by private sectors is not out of place, same applies all over the world and at even higher rates in some advanced countries, so I personally don't have issues with this.

However, my concern is the hyprocricy of the government.

A total of 261b is expected from tax on those telecom services alone. The customs boss, hameed ali, said the govt makes about 9b daily following border closure. Few days ago, the Labour minister, Chris Ngige, was complaining bitterly that if the government had to bow to labour demand on consequential salary adjustment of higher grade civil servants, it will cost the govt about 580b. This amount is more than sufficiently covered from just these taxes, not minding other newly introduced taxes like some funny bank charges, reintroduction of tolls on our roads, etc.

The hyprocricy on display here is that, while the above mentioned taxes (like the excise duty) have taken effect, or at worst few days to take effect (for others), negotiation for consequential salary adjustment is still in progress since April that the new minimum wage was signed into law.

This is nothing but plain hyprocricy.

Someone from Borno state proposed it? That was his genuine concern? Jesus Christ!

helinues:
Government is planning to tax us for using data, so as the network providers. Make Dem kuku kill us now..

Meanwhile, it is only in Nigeria unlimited data bundles expired before 25th

"unlimited" is basically finite here rather than infinite. The exploitation is out of this world.

A special thanks to whosoever initiated/proposed this wonderful tax.

We, the Nigerian Youths are grateful.

Please we should also be taxed for being unemployed or for earning peanuts as well.

Next Level O!

We are all in these together

SincereBigot:
Anything concerning next level, i am pleased afterall baba told us to get ready for hard times.. buhari till 2027

Yes now. Nobody is permitted to tracks for now

Hmm, 1Gb of data will now seem like 500mb and N1000 airtime may seem like N500- before you pronounce lala.sticlacla, e don finish.

naijadrivablog:
Hmm, 1Gb of data will now seem like 500mb and N1000 airtime may seem like N500- before you pronounce lala.sticlacla, e don finish.

They are just pushing us to do our worst!
I'm curious if manna BBQ will be having enough data money from his grills by then, perhaps bubu would be supplying them special data

Nigeria corruption has taken another dimension. Non oil revenue corruption and this will be suffered by the masses that live on less than a dollar. We want to adopt UK tax system but act like Chad in development. Welcome to Next le el

everything yagayaga. nigeria just dey jagajaga. poor man dey suffer suffer.

Last _ last NA we southerners go sofa 65 to 70% of this but NA northerners go spend 65 to 70% of the money...... Nigerian here we come

This peep just want milk us by all means..as we dey suffer dem self no go know peace..if God mercy una wey una enjoy life una no go see God mercy for heaven

Nigerians too talk for phone sef. Funny enough my driver who is far lower than me in the economic ladder spends more time on the phone than me.

I pity we the 9mobile subscribers, we will pay dearly for this.

the redundant coupist and cohorts are hell bent on sniffing life out of the common man!

only a bloody revolution can salvage the doomed shithole!


these satanic rulers deserves a special place in hell!

COMPAQ:
Nigerians too talk for phone sef. Funny enough my driver who is far lower than me in the economic ladder spends more time on the phone than me.

what is meaning of this rubbish u just typed?I don't want to believe that the driver is more reasonable than u .

I see