Telecom operators have faulted the planned new tax on telephone users in the country by the Federal Government, describing it as badly intended. The operators said the implication is that subscribers will get less value for any recharge they make when implementation begins fully.
News filtered in on Sunday that the Federal Government has introduced a new tax on telephone users in the country, proceed of which is targeted at funding free healthcare for the Vulnerable Group in Nigeria.
Contained in the National Health Insurance Authority Bill 2021 signed by President Muhammadu Buhari last week, the new telecoms tax in the equivalent of a minimum of one kobo per second for phone calls is a part of the sources of funds required to finance free healthcare for the Vulnerable Group in Nigeria.
But the service providers, under the aegis of Association of Licensed Telecoms Operators of Nigeria (ALTON), wondered why their plea for a 40 per cent tariff hike was rejected and government now introduced another tax on subscribers they claimed have been over-labored.
The Chairman of ALTON, Gbenga Adebayo, said: “It is bad fate on the part of government and I think it is badly intended. This is because when we came out that government should look at our cost of operation and give us a room to review tariffs, everybody treated us like outcast. The same government is now coming in a matter of days to say they are introducing new taxes.
“So, if we cannot review based on the impact it will have on subscribers, why are they bringing in another tax, still on subscribers. Government cannot act in one way and say another thing.”
Adebayo said the impact would affect subscribers significantly. According to him, “this is because they will get less value for what they pay for. It means now that when you buy N100 recharge card, the percentage for tax will be deducted from it and paid to government. So, it is actually short-changing the people. ”
On his part, the President, National Association of Telecoms Subscribers of Nigeria (NATCOMS), Chief Deolu Ogunbanjo, said: “It is unfortunate that the government is viewing telecoms as a cash cow. This should not be. There is a lot of corruption in the system and rather than curb that, they want to focus on the telecoms sector. By the way, what do they mean by vulnerable. Vulnerable people are probably 80 per cent, we are all vulnerable.”
Ogunbanjo queried what has happened to the health budget. “Why should it be telecoms again? The government should look elsewhere for money. This new action is only likely to impoverish more Nigerians and they are masquerading under helping the vulnerable. This is not right.
“If this stands, the taxes are likely going to be diverted into the national corruption largesse of the nation. They should leave telecoms alone. Let the Federal Government clean up the NNPC and tax it anew. The recent global energy crisis is helping the price of crude oil, shouldn’t they be focused on getting extra revenue from there. They shouldn’t touch telecoms. They should fund the health budget very well. There is a need to check corruption in the system not spread their extraction tax to Nigeria.
“How will they even identify the vulnerable? Businesses will have to increase their costs because whatever affects telecoms affects everyone.”
Another industry source, who preferred anonymity, said operators are still confused about which of the Act actually contained the new tax.
According to him, “there is one that contains the one kobo tax, which if you check translates to about nine per cent. Then there is another one that was signed by the clerk of the house, on April 21, that one does not contain anything about tax. As we speak, the industry is trying to get the version that the president signed to check whether the that clause, that is section 26 1(c), is in the one signed.
“Right now, we do not know. But we have both bills. The danger with it is that one side we really need to fund health, one the other side we ask all the other taxes that have been collected, what have they been used for? If it is being managed well, you do not need to tax people again. But those are conversations we can have.
“The President has signed it, meaning it has kicked in. What we are saying is that we do not know which version. The press says there is a VAT, but there are two versions signed by the clerk of the National Assembly. Usually, the legislative process will go through the one in the House of Reps, and the one in the Senate, before it is harmonised, and signed by the clerk. Then it goes to the president, and he ascends. Right now, we do not have the version the president signed. So I can’t say if that tax is there.
There are two versions that we have, what we have is based on what the press reported. I do not know whether it is the first version or the second one. We would know soon. None of them have been gazetted which is why there is confusion.”