The Senate of the Federal Republic of Nigeria is working on a bill that if passed, will impose taxes on communication and cable television services.
The bill scaled first reading on the floor of the senate on Wednesday, October 2, 2019, Punch reports.
The ‘Bill for an Act to establish the Communication Service Tax’ is the brainchild of former Senate Leader, Ali Ndume (APC, Borno South).
He also stated that his bill would have minimal impact on the mass of the people.
Punch reports that the bill is tailored to replace the 2.2 per cent increase in Value Added Tax (VAT) as proposed by the federal government.
The senate is no fan of the federal government’s VAT proposition.
According to Ndume, increasing VAT would leave Nigerians reeling from the effect, because it will invariably lead to inflation.
His bill, he says, is a far better deal.
Ndume’s bill will ensure that consumers pay a 9 percent charge when they make a call, consume data or subscribe to a cable TV platform.
The bill reads in part: “There shall be imposed, charged payable and collected a monthly Communication Service Tax to be levied on charges payable by a user of an electronic communication service other than private electronic communication services.
“The tax shall be levied on electronic communication services supplied by service providers.
“For the purpose of this clause, the supply of any form of recharges shall be considered as a charge for usage of electronic communication service.
“The tax shall be levied on such electronic communication services like voice calls, SMS, MMS, data usage – both from telecommunication services providers and internet service – as well as pay per view TV stations.
The bill stipulates that the Federal Inland Revenue Service (FIRS) would channel the tax raised from consumers into the federation account.
All service providers would then file a tax return to account for the tax, the bill states further.
The bill will go through two more readings before it becomes law.