Nigeria’s Senate is mulling over a bill that suggests a 9 percent tax on communication services.
CST will charge 9% on Electronic Communication Services such as Voice Calls, SMS, Data, and Pay per view TV Stations.
The Communication Service Tax (CST) bill aims to diversify the country’s economy and reduce inequalities in the economy.
Section 1 of the Bill said: “There shall be imposed, payable and collected a monthly CST levied on charges payable by a user of an Electronic Communication Service other than private Electronic Communication Services.
While the bill sparks controversy, the sponsor believes that CST would encourage wealth distribution without affecting the ordinary citizen. Moreover, Senator Ali Ndume asserts that the bill is a better alternative to a proposed 2.2% increase in VAT.
Ndume holds that a higher VAT will increase the cost of goods beyond the reach of the common man and therefore spell a negative impact on the economy.
Telecoms Oppose Communication Service Tax
Telecommunication operators warn that the bill will add a fresh burden to citizens. According to the ALTON Chairman Gbenga Adebayo, the bill’s passing will increase the end-user call tariff.
At the same time, ATCON vowed to resist the Communication Service tax, which might possibly reduce the number of internet users.
The bill awaits a second reading before it proceeds to the appropriate committee for further legislative action.