JULY 4, 2016 – Stakeholders Vote against ICT Tax, Warns of Dangers Stakeholders in the country’s telecommunications industry have frowned at the proposed communications tax bill before the National Assembly, saying that it is capable of discouraging potential investors as telecommunications services will no longer be affordable thereby reducing its demand.
For Alliance for Affordable Internet (A4AI)-Nigeria Coalition, the proposed ICT tax, will prevent over 50 million Nigerians from being able to afford a basic broadband connection, a situation that will also deny them internet access.
Dr. Ernest Ndukwe, national coordinator for A4AI-Nigeria Coalition, said: “Balanced fiscal policy must consider affordability of broadband and ICT, and should not put into place additional barriers that will make internet access unaffordable to hundreds of millions of Nigerians. Nigeria is far behind the more developed countries of the world when it comes to broadband use, and the introduction of the CST will only widen this gap.”
Elsewhere, Engr. Lanre Ajayi, immediate past president, Association of Telecommunications Companies of Nigeria (ATCON) said that such tax is a disincentive to potential investors.
“It will certainly scare them away. Operators are already paying into USPF, NITDEF, ITF, TETFUND among others. Additional tax is an over kill”.
Nodding in agreement, Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), said that it will widen the gap between availability and affordability which will add to the burden on the subscribers.
“The time is not a time to introduce new tax on subscribers as many other costs have gone up and if telecom services cost is increased by way of additional tax, then it will lead to a situation where people cannot afford available services hence widening the access gap in the country.
Also, Adeolu Ogunbanjo, National President, National Association of Telecommunications Subscribers (NATCOMS) stated that by impacting usage of communications services and in turn industry revenues, this proposed tax will have adverse effect on the industry investment needed to improve and expand mobile connectivity across the country.
Mobile industry investment in Nigeria is already constrained by multiple level of taxes and fees set by local and regional authorities, in addition to fees to the national telecommunications regulator and high costs of right of ways. In a context of declining average revenue per user, this can make it more difficult for mobile operators to make a business case for investment.
The proposal would also further increase the administrative cost burden on service providers to comply with numerous and complex tax regulations, already high compared to other countries.
