Monday, 28 November 2016

Tax On Calls By CBN Gov - Nigeria Telecoms Companies Kick Against It

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I would be starting this article from the view that i never intended writing on it at all because it was such a thing i saw as illegitimate. Maybe some other countries in the world maybe doing such, but not here in Nigeria where things can be a little different, and the best thing you can think of is putting tax on calls made by innocent Nigerian. Saying any calls made above 3 minutes will be taxed a particular amount.. Really?

Tax On Calls By CBN Gov - Nigeria Telecoms Companies

This rift actually started some days back when the Nigeria CBN - Central Bank of Nigeria - Governor in person of Mr. Godwin Emefiele at an Annual Bankers' Dinner on Friday, November 25th 2016. When he came out to make it clear in the dinner occasion that the CBN would start to tax all calls made by phone users above 3 minutes. Stating clearly that it could generate an additional N100 billion annually...

Quoting Him:
“There are several ways we can raise additional revenue to finance the increased expenditure that is needed to engender fast and sustainable growth in the economy. I think we can consider introducing a negligible telecom surcharge to be entirely borne by the initiator of a call. In order to protect the poor and vulnerable amongst us, we could structure it to only take effect after the third minute of talk.
Some analyses have indicated that the government could earn about N100 billion per annum from this alone.”

But now, the telecoms operators in Nigeria have come to speak against the 3 minutes tax on call by the CBN Governor, that this is economically wrong. The President of ATCON - Association of Telecommunications Companies - which is a body that comprises of all telecoms companies in Nigeria; in person of Olusola Teniola came out to tell the media on behalf of all telecoms operators that such suggestion made by the CBN Governor to put tax on calls is economically and technically wrong.

Mr. Olusola Teniola said and i quote...
"That the stakeholders in the telecommunications industry were not consulted on the issue before the pronouncement. “Contrary to the CBN governor’s belief, it is the poor people who make more calls than the rich.
“So, the proposal is not targeted at the middle or higher class. “I have not seen any industry where you don’t want people to use your products or services more.
“We want people to be speaking longer... "

He added;
"That the CBN governor’s proposal that people should cut their phone calls after three minutes had not been founded on any theory.
“In fact, you will now see that people will be cutting their calls.
“It does not make sense, not only technically but economically, to apply that kind of thinking as a tool or solution out of the present economic recession, it is not going to work,’’

Then further stated...
"That ATCON had already proposed to the Senate a one per cent VAT increase across all sectors. This is a more realistic measure toward getting more revenue for the government and ICT industry had been envisaged to help the country gets out of recession."
“But the sector should not be killed with over taxation,’’

He made it clear that if it was for the generation of revenue to finance the increased expenditure that could engender fast and sustainable growth of the economy, then some suggestions can be taken from him such as:

“I think we can consider introducing a negligible telecom surcharge to be entirely borne by the initiator of a call in order to protect the poor and vulnerable amongst us.
“We could structure it to only take effect after the third minute of talk.“Some analyses have indicated that the government could earn about N100 billion per annum from this alone.
“Obviously, this surcharge will mainly be borne by middle and upper class people since I do not know many poor people who make calls for more than three minutes,’’ - he suggested.

So folks you have heard it all, what do you have to add?

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