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
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
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.