The Association of Telecommunication Companies of Nigeria (ATCON) has said that the passing into law the nine per cent Communications Service Tax (CST) bill currently before the Senate would deprive 20 million Nigerians access to telecommunications services.
This is contained in a statement issued on Saturday in Lagos by ATCON’s President, Mr Olusola Teniola after he led a delegation of his members on a courtesy visit to the Senate President, Dr. Bukola Saraki.
He urged the Senate to use its legislative powers to reduce the nine per cent Communications Service Tax (CST) to 0.2 per cent.
Teniola said that the nine per cent new tax on ICT services that was being proposed would exclude 20 million Nigerians, which represented 10 per cent of the country’s population, from accessing telecommunication services.
He said that ATCON’s mandate was to support the Federal Government to succeed in attracting and protecting investments in the telecommunications industry.
“ATCON’s mandate is to make meaningful input to all aspects of economic development, including legislation and management of telecommunications industry, so it continues to oil growth and development.
‘`The ongoing work on the proposed nine per cent Communication Service Tax Bill is a trending subject.
“We will be happy to support government to make the best of our tax efforts, which certainly are key components of strengthening the economy and sustaining our industry.
“Contrary to uninformed opinions; we do not object to reforms in taxation, neither do we regard taxes as burden.
“We ask for a reconsideration of the CST Bill, we recommend, as an alternative, a tax reform that increases the current VAT by a new one per cent added for the purpose of development of communications.
“Another alternative is that the tax being proposed in the Bill be limited to 0.2 per cent,” he said.
Teniola said that there was severe pressure at these times and Government revenue could be different.
He pleaded that the template, with which the telecommunications industry was viewed and assessed, be slightly modified.
“The truth is that there is severe over taxation in our industry. It explains the slow penetration of services into areas yet to be covered by our services across the country.
“Contrary to popular belief, telecommunication operators and service providers are barely sustaining existence in these times.
“There are reasons to suggest that the desire to widen the tax net is laudable and that as things stand telecommunications is about one of the few areas where the net-capture may be widened,
“We, therefore, suggest that an increase in VAT tax, which is already included in all services of telecommunications by an increase that is not beyond one per cent will be a good reform strategy,” he said.
Responding, the Senate President, Dr. Bukola Saraki assured the ATCON leadership that the Senate would only make laws that would get the economy going, adding that the telecommunications sector was critical to the nation’s economy.
”The ICT sector is critical to the Nigerian economy; as a result, the Senate will never make laws that will push the sector into a negative performance.
“Rather, the Senate will make laws that will increase its performance to generate revenue and create jobs,” Saraki said.
He also urged the telecommunications sector to take the issue of corporate social responsibility more seriously.
Only the organised private sector such as ATCON could get the country out of recession, he said.