Nigeria: Parliament wants to introduce 9% additional tax on telecommunications

Nigeria’s telecommunications sector should be subject to a new tax soon. Parliament is currently working in this direction. The bill introduced by the Senator of Borno South, Ali Ndume, already adopted in first reading by the Senate, plans to impose all electronic communication services such as voice calls, SMS, data also provided by telecommunication companies as well as by Internet service providers and television service providers. 

The tax, which will be borne by consumers, as specified in section 2 of the bill – “The tax must be paid at the same time as the electronic communication service tax payable to the service provider by the consumer of the service” – is not at all greeted enthusiastically by telecom operators.

According to Gbenga Adebayo, the president of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), communication is currently one of the most affordable basic needs for Nigerians, but this new tax will increase the cost access and somehow will curb consumption. 

For Olusola Teniola, president of the Association of Telecommunications Enterprises of Nigeria, the government should consider reducing public spending to save money instead of taxing it again.

He argued that the new tax  “will have a significant impact on expenses because people who have generally been able to afford services will no longer be able to, because they will be more expensive”.

”  This will have a ripple effect on the economy, gross domestic product and telecommunications revenues. Productivity will decrease because it will cost more to make calls and other communication services. Nigeria has one of the highest numbers of taxes paid. This is just another extra burden for consumers, “ lamented Olusola Teniola.

Source: Agence Ecofin