Opinion: Opposing the proposed Communication Service Tax

by Constance Azuru

The proposed Communication Service Tax (CST) Bill is creating ripples among telecommunication consumers, in particular, and the Nigerian landscape in general.

The controversial Tax Bill has passed the first reading at the House of Representatives and it will, upon passage and assent, compel communication service subscribers to pay additional tax on services rendered by their providers.

These include voice calls, SMS, MMS, Data and Pay TV viewing.

Specifically, CST Bill will impose a 9% service charge payable monthly by the user of an electronic communication service as supplied by the service providers.

The controversial Tax Bill has passed the first reading at the House of Representatives and it will, upon passage and assent, compel telecommunication service subscribers including satellite TV like DSTV to pay additional tax on services rendered by their providers.

The others include GoTV, Startimes and other the telecom operators. Services such as voice calls, SMS, MMS, Data and Pay TV will all have an additional 9% tax imposed on the services meaning the subscriber will pay the usual cost of service plus 9% of that cost.

At a time when the drive should be intensified to attract investors – local and foreign – to commit their resources into rescuing the troubled Nigerian economy, concerned Nigerians are worried that our lawmakers are seeking to enact laws that will introduce disincentives.

The proposed CST Bill will not only deter new investors from coming into our country but will also force the current foreign investors to stagnate further investments.

The CST is not a wise move from an investor perspective.

The CST Bill is retrogressive for an economy that requires help from all fronts to alleviate the suffering of its people, the same people who will now be further taxed.

This CST Bill, if passed into law, will have multiplier effects on the Nigerian economy.

Communication services will become more expensive due to the additional tax and this would affect the purchasing power of the average Nigerian subscriber.

This situation will prevent people from renewing their subscriptions for pay TV and internet services and the result will be reduced ROI for operators.

The goal of the Nigerian government should be to make Nigeria an investment friendly country and not an investment pariah.

We must throw out the CST Bill and create a more tax-friendly environment for investors.

That is what Nigeria needs now and not obnoxious laws and more taxes like the CST.


Op–ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija

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