The Association of Licensed Telecoms Operators of Nigeria, ALTON, has described the recent move by the Federal Government to add a one kobo per second tax on phone calls as a bad move.
According to ALTON, this is insensitive considering the operating environment of telecom companies.
The all-embracing body for telecom companies said, “For us as at ALTON, it is bad fate on the part of the government, and it is badly intended. This is because when we came out that the government should look at our cost of operations and give us room to review tariffs, everybody treated us like an outcasts.
“The same government is now coming in a matter of days to say they are introducing new taxes. So, when they were saying to us that we cannot increase tariff because it is insensitive to the plight of the people and now, they brought another tax through the back door, we think it is bad fate and badly intended. So, if we cannot review based on the impact it will have on subscribers, why are they bringing in another tax, still on subscribers. Government cannot act in one way and say another thing”.
According to the Nigerian Communications Commission (NCC), Nigerians made 150.83 billion minutes of calls in 2020. This translates to 9.05 trillion seconds of calls, meaning the new tax will generate 9.05 trillion kobo, which converts to N90.49bn, yearly.
This new tax is coming despite moves by telecom companies to increase the price of calls, SMS, and data by 40% as a result of an unfavourable operating environment.
The Federal Government is proposing a one kobo per seconds tax on phone calls in the nation to fund free healthcare for the Vulnerable Group in Nigeria, which translates to a nine per cent tax on GSM calls if implemented.
This was recently disclosed in the National Health Insurance Authority Bill 2021 signed by the President, Muhammadu Buhari.
ALTON added that the new tax would reduce the value subscribers get from telecom services, as they would need to pay more to enjoy what they used to.
“It will affect the subscribers because they get less value for what they pay for. It means now that when you buy an N100 recharge card, the percentage will be deducted from it and paid to the government. So, it is actually short-changing the people. What will happen is that operators will be mandated to collect this tax on their behalf and remit it to the government” the association stated.
It said the government should consider taxing another industry rather than telecoms.
According to ALTON, subscribers will have to pay extra for this new cost.
“This can be introduced to another sector of the economy.
“The reason for it is understandable, but we think it can be sourced from another source, not telecoms subscribers, whom government itself has said they are suffering because of high of living lately. We will not complain as operators because we will definitely remit, it is the subscribers that will bear the brunt”, it explained.
Story: Asma’u Sani