The proposed communications service tax, a bill now before the National Assembly, is at best a killer pill, a blatant and callous way of expressing government’s uncaring feeling and, indeed, the height of insensitivity to a people who are already down on their knees with their backs breaking from needless and endless taxes in the absence of any social and physical infrastructure to make life worth living for the citizenry.
Taxing the people through what has become known as perhaps the only globalised channel of social cohesion that has also reached the commonest of the common and the poorest of the poor in Nigeria, communication, is to say the least inhuman; and whoever introduced it has no interest of Nigerians at heart. It is more worrisome that such tax is being introduced by the very people who should be helping to make life better for the people, the lawmakers; and at a time many Nigerians are finding it hard to survive, while millions are losing their jobs on daily basis as the economic crunch bites harder. But perhaps this is another way of telling Nigerians that even in this dispensation, the lawmakers are smiling to banks hence have no knowledge of what is happening in their environments or to their people.
And it does appear the government wants to make communication, which is the only means through which many get succour, inaccessible to the already impoverished Nigerians through the proposed tax. Otherwise, how else will the government explain a law that seeks to compel people to pay tax on calls or data they used, when there is already Value Added Tax on every service and product consumed by the people?
The bill, titled ‘Communication Service Tax Bill (“CST” or the “Bill”) 2015’, wants to impose, charge and collect Communication Service Tax (CST) and such tax will be levied on service fees payable by users of electronic communication services at 9 per cent and will be borne by the customers. Specifically, Section 2 of the bill listed the chargeable services to include voice calls, SMS, MMS, pay per view TV stations, data usage from telecommunication services providers and internet service providers.
Before now, telecommunications operators in the country have been lamenting about the challenges of multiple taxation, as various levels of government as well as government agencies see the sector as their cash cow and would do everything to milk them dry all in the name of taxation; as ridiculous as some of them are. While they have complained over the years without respite, the telecommunications companies are still bearing the burden, but not alone; the subscribers are also bearing part of it as reflected in the tariff plans. And to say that an additional tax on this overburdened sector is the next alternative to shoring up government’s revenue is nothing but sheer wickedness, which can only come from a thoughtless people without a direction.
Elsewhere, governments are concerned about deepening people’s access to communications through voice and data and are doing all in their powers to achieve these through subsidies that make the services affordable to all citizens. For instance, the government of United Kingdom last year launched what it described as “subsidy (voucher) scheme to support the installation of “superfast” (24Mbps+) capable Satellite broadband services in remote rural areas.”
In 2014, the U.S. Federal Communications Commission earmarked $9 billion for broadband subsidies, in an effort to bring high-speed Internet services to five million U.S. residents who didn’t have access. The FCC vote provides $1.8 billion a year, starting in 2015, to a broadband deployment fund where large carriers such as AT&T and Verizon Communications have the first shot at accepting the subsidies.
Also last year, the White House unveiled another effort to expand broadband access to low-income households. Under a new federal program called ConnectHome, low-cost broadband connections, even including free Google Fibre access in some markets, are offered to low-income families in markets across the country. This came on the realisation that expanding broadband access means access to job opportunities, homework help, and communication with family and loved ones they wouldn’t otherwise have.
And with the current scenario playing in Nigeria, we cannot but ask what the government intends to achieve by introducing taxes that will impede the masses’ access to communications. Ironically, the country is in the pursuit of deepening broadband penetration with a target of moving from the current 10 per cent penetration to about 30 per cent by 2018. Could this be achieved by imposing additional tax on the people, specifically on their calls, data usage and internet connectivity?
While it is obvious that the government needs to shore up its revenue due to the crumbling oil price, the idea of putting more burdens on Nigerians by way of communications tax is misplaced and the bill proposing such is worth no other place than the trash can. Besides, the National Assembly should be mindful of the present hardship the masses are facing as a result of poor economic vision; if indeed, they are elected to represent the interest of the people and they want to stay true to that, this bill should not even pass the second reading, let alone the third at the floor.
For one, communications is an essential tool for development and the government should be doing all it takes to ensure that all citizens have access to the tools. To impose a tax that will hamper access to communications services is a counter-productive measure and one that should not even be contemplated by any nation in this 21st Century.
If anything, the government should be seen addressing the existing challenges of multiple taxation in the telecom sector, which in itself is hampering telecom service delivery to the people; and also stands on the way to achieving increased broadband penetration.
We should be hearing of how government plans to subsidise telecommunications services deliver, especially for people living in rural and semi-urban as well as under-served areas; not the nightmare of another tax – certainly not a tax on consumers for communication services.