GSMA bemoan Nigeria’s 9% communication tax

Nigeria’s proposed 9% Communications Service Tax Bill has been condemned by the GSM Association (GSMA), a global association of mobile operators. It said the proposed law would adversely impact on the digital development of Nigeria.

In its latest report on “High consumer taxes on mobile could hold back Nigerian economic and digital development,” GSMA said that the tax would negatively affect the mobile adoption of Nigerians.

“If mobile is going to reach its potential for development in Nigeria, supportive policies that increase digital inclusion and drive even greater growth are needed,” it said. “For these reasons the GSMA, along with other industry organizations including ALTON, ATCON and NATCOMS, has rejected the Nigerian government’s proposed ‘Communication Service Tax’ that would establish a nine per cent tax on users of services such as SMS, voice calls, MMS and data. By pushing up the cost to consumers, this tax will inevitably adversely impact the adoption of mobile.”

It can be recalled that earlier this year,  in a letter jointly signed by Mortimer Hope, Director Africa, GSMA, Engr. Gbenga Adebayo, Chairman, ALTON ,  Engr. Lanre Ajayi, President ATCON and  Chief Adeolu Ogunbanjo, National  President, NATCOMS  to the Minister  of Finance, Mrs Kemi Adeosun, and the Minister of Communications, Mr Adebayo Shittu, the group noted that the  the proposed bill  under consideration by the National Assembly, to establish a 9% communication service tax to be levied on charges payable by a user of an electronic communication service (i.e., SMS, voice calls, MMS, data usage) supplied by service providers will not promote telecommunication development in the country.

According to the group, the tax if introduced will result in an increase in prices for consumers, have adverse impacts on the adoption of mobile services and industry investment, adding that it will be counter-productive to the longer term national digital strategy objectives set by the Government of Nigeria.

Taxing electronic communication services, GSMA said, would hit lower income consumers the hardest, making access to mobile even less of possibile.

“It is these consumers and communities that stand to gain the most from the social and economic inclusion that access to mobile provides.”