Bill Imposing Tax on GSM & Cable TV Subscribers Passes First Reading at Senate

The Senate, on Wednesday passed for first reading a bill for an Act to introduce tax on Communication Services and Cable television services. The proposal, entitled “A Bill for an Act to establish the Communication Service Tax” was sponsored by a former Senate Leader, Ali Ndume.

The bill was introduced to replace the 2.2 per cent increase in the Value Added Tax being planned by the Federal Government as announced by the Finance Minister, Zainab Ahmad, Punch reports.

Ndume told journalists shortly after the first reading of the Bill that the imposition of tax on communication service was a better way of distributing wealth in such a way that would not affect the ordinary Nigerians.

He explained that increasing VAT would have very bitter consequences on the economy, saying that it would lead to a hike in the prices of goods and services and take them beyond the reach of the ordinary people. The bill provides the charging of 9 per cent on calls and data usage and the pet view cable subscribers.

The Bill partly reads:

There shall be imposed charge 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 tax shall be paid together with the electronic communication service charge payable to the service provider by the consumer of the service.

The tax is due and payable on any supply of electronic communication service within the time period specified under sub-clause (5) of whether or not the person making the supply is permitted or authorized provider of electronic communication services.”

The bill stipulates that the Federal Inland Revenue Service (FIRS), established under Section 1 of the Federal Inland Revenue Service (Establishment) Act, 2007, will be responsible for collection and remittance of tax, any interest and penalties.

It added that the FIRS shall pay the tax collected together with any interest and penalty into the Federation Account.