The Alliance for Affordable Internet, A4AI, has raised alarm over Federal Government plans through the National Assembly to enforce new tax law that will make users of internet in the country to pay tax on information and other activities carried out on the global communication highway.
A4AI said that there is a Bill before the National Assembly on Communication Service Tax.
National Coordinator of coalition, Ernest Ndukwe, who signed the document said that the goal of the CST Bill was to improve revenue generation as stated in it.
While urging the government to seek other means revenue generation, he said that increased access to the Internet has significant and well-known positive socio-economic benefits for the individual user, their community, their business, and the country as a whole.
Ndukwe, who is a former Executive Vice Chairman of the Nigerian Communications Commission said that the coalition is opposed to passage of the CST Bill, and that “if the tax must be introduced the government must consider a lower tax rate that enables it to achieve fiscal revenue targets without undermining broadband affordability and access.”
Specifically, he said that the CST tax was proposed to be a nine percent charge for the use of the communication service, where communication service refers to voice, SMS, MMS, data, and pay per view TV.
The Alliance said that mobile operators paid approximately $850 million in taxes and regulatory fees to the government in 2014 and $760 million in 2013.
The document indicated that “the taxes and regulatory fees currently applicable to mobile phone operators fall under several categories, including duties on imported equipment, regulatory fees, taxes on profits, environmental taxes.”
It stated further that those taxes that are more relevant to the consumer include taxes on handsets, SIM cards, and services, and that “it is this latter set of taxes that we are of utmost concern as they have the most direct impact on the affordability of Internet access for Nigerians.”
The Alliance said that currently a VAT of five percent applies to devices and communication services purchased by the consumer adding that handsets (12 percent) and SIM cards (20 percent and 35 percent special levy) attract additional custom import duties and levies.
