Federal Government set to take 9% of your every phone recharge and sms.

The federal government is planning a nine percent tax on SMS, MMS, phone calls, and pay TV bills in Africa’s largest telecommunications market Nigeria.

Adebayo Shittu, minister of communications, had initially said the plan would fetch as much as N20 billion for the federal government on a monthly basis, translating to N240 billion in a year.

“I have been reliably informed that the projected earnings from this effort is over N20 billion every month, which is an attraction to the government for funding our budget deficits,” Shittu had said.

He however added that the “this government has a human face twined around its decisions,” stating that it would consider the masses before implementing such.

Just while we were brooding over this, the Communication Service Tax (CST Bill 2015) had passed first reading at the house of representatives, and may soon scale its second hurdle into becoming a law.

Although the law has been criticised in some quarters, the government is doing all it can to get out of a recession, which may include Nigerians’ N9 on every N100 recharge.

“Our appetite as a government to increase revenue makes this bill worthy of our consideration,” Shittu also stated.

The minister acknowledged that Nigeria had achieved only 10 percent broadband penetration, as against the 30 percent mark set by the International Telecommunications Union (ITU) for 2018.

“If we are to catch up with lost ground and meet up with the expectations of the global community in the area of affordable broadband service, we have to incentivise the populace by helping to aid access to low cost data service subscription,” he said.

The minister said that the government would provide an enabling environment for the ICT and telecommunication sector to thrive through the enactment of relevant legislation.

Nike Akande, president of Lagos Chamber of Commerce and Industry, weighed in on the policy, saying government must balance revenue generation against friendly tax policy.

The National Association of Telecommunications Subscribers (NATCOMS), Association of Licensed Telecommunications Operators of Nigeria (ALTON) and the Association of Telecommunications Companies of Nigeria (ATCON) have also expressed opposition.

But N20 billion per month is a lot for the federal government at such challenging time as this. Do you stand with the government or with opponents of the policy?