Everything you need to know about the “Communication Service Tax Bill”

by Usman Alabi

It is called the “communication service tax bill

It has passed the first reading both in the Senate and the House of Representatives

It seeks to introduce a nine percent tax on electronic communication service fees charged by service providers which include charges on voice calls, short message service (sms), multimedia messaging service (mms), data usage from other telecoms providers, internet service and pay television stations.

It also provides that communication service providers would be required to charge CST on the services outlined above and remit to the FIRS. Failure to remit as specified would attract a penalty of fifty thousand naira plus a ten thousand naira for each day of default and interest at the rate of 150% of the average prevailing commercial lending rate published by CBN.

The FIRS, ministry of communication and the Nigeria Communication Commission (NCC) are responsible for the enforcement.

The bill is expected to rake in 20 billion naira per month for the government; it is seen as an attempt by the government to increase its non oil revenue and its tax income. Experts have however criticized the bill for been insensitive to the plight of the telecom operators who are seen as overtaxed by both the federal and state governments; they believe that the bill has the potential of stifling foreign direct investment into the communication sector, thereby reducing its contribution to the GDP. They also believe that eventually the service consumers bears the brunt, they would invariably pay the tax.

We want to hear your views on this bill, do you agree with the experts that the bill would do more harm than good?, let us hear your comments.