Telecom providers kick against FG’s move to impose new tax on GSM phone calls

Telecom service providers in the country have kicked against the newly proposed tax on phone calls by the federal government.

The government had imposed a telecom tax in the equivalent of a minimum of one kobo per second for phone calls after President Muhammadu Buhari signed the National Health Insurance Authority Bill 2021.

According to the new law, this will be part of the sources of funds required to finance free healthcare for the Vulnerable Group in Nigeria.

The law includes a provision under Section 26 subsection 1c of the act which states that the source of money for the Vulnerable Group Fund includes “telecommunications tax, not less than one kobo per second of GSM calls.”

However, the telecom providers under the umbrella of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), argued that the decision was contrary to the position of the government recently when they (the operators) announced plans to increase tariffs because of the high cost of diesel powering their base stations.

According to the Chairman of ALTON, Engr. Gbenga Adebayo, telecom subscribers will bear the brunt of the new tax because they will now get less value for what they pay for. He adds that the operators will have no choice but to start deducting the tax from the subscribers’ recharge once mandated by the government.

The ALTON Chairman said: “For us as at ALTON, it is bad fate on the part of government and I think it is badly intended. This is because when we came out that the government should look at our cost of operations and give us a room to review tariffs, everybody treated us like outcast.

“The same government is now coming in a matter of days to say they are introducing new taxes. So, if we cannot review based on the impact it will have on subscribers, why are they bringing in another tax, still on subscribers. Government cannot act in one way and say another thing.”

According to Adebayo, tax could be introduced to another service, not a service that is so live-impacting like telecommunications.

“The reason for it is understandable, but we think it can be sourced from other sources, not telecoms subscribers, whom the government itself has said are suffering because of the high cost of living lately. We will not complain as operators because we will definitely remit, it is the subscribers that will bear the brunt. I say again that for us to have a sustainable industry, we must price right. Government cannot escape from this responsibility for a long time,” he said