A bill seeking to impose a nine percent tax on Nigerians for using communication and cable television services in the country on Wednesday passed the first reading at the upper chamber of the National Assembly.
Sponsored by a former Leader of the Senate, Ali Ndume, the bill seeks to replace the 2.2 per cent increase in the Value Added Tax being planned by the Federal Government.
The bill is titled A Bill for an Act to establish the Communication Service Tax.
Ndume, while briefing journalists shortly after the first reading of the bill was taken by the Senate, said the imposition of tax on communication service was a better way of distributing wealth in such a way that would not affect the ordinary people.
According to him, increasing VAT would have very devastating effects on the economy as it would raise prices of goods and services.
The bill provides the charging of nine per cent on calls and data usage.
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 tax shall be paid together with the electronic communication service charge payable to the service provider by the consumer of the service.”
The bill also stipulates that the Federal Inland Revenue Service (FIRS) would pay the tax collected together with any interest and penalty into the Federation Account, while all service providers shall file a tax return to account for the tax.
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