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Tuesday, September 06, 2016

ALTON to Shittu: Communication Service Tax amounts to double taxation, impracticable

The Association of Licensed Telecoms Operators of Nigeria (ALTON) has responded to the recent comments attributed to the Honourable Minister of Communication, Barr. Adebayo Shittu in Osogbo, Osun State, alleging that the proposed tax would help to improve telecommunication infrastructure in the country, reports ITRealms.

ALTON in response said that it amounts to double taxation and impracticable due to avalanche of flaws in the proposed bill.

Shittu, ITRealms gathered was also quoted as saying that “We have a lot of deficiency in the provision of infrastructure in the telecommunication sector. “And I believe that those who proposed the bill must have thought that government centrally relies on tax because without tax, government cannot operate.”

ALTON, ITRealms reports, is a body corporate, duly registered under the laws of Federal Republic of Nigeria as an Incorporated Trustee, and officially recognized by the Government of the Federal Republic of Nigeria and the Nigerian Communications Commission as the official industry body for all licensed providers of telecommunications and subsidiary services in Nigeria.

Responding to Shittu remarks, ALTON, took to its ground that any attempt to uphold the Communication Service Tax (CST) would amount to double taxation.

ALTON chairman, Engr. Gbenga Adebayo, in its submission after a review of the proposed bill submitted that the introduction and collection of the Tax without the exclusion of the applicability of the Value Added Tax (“VAT”) which was introduced by the Value Added Tax Act and is also applicable to services rendered by Service Providers in the telecommunication sector will amount to double taxation as the proposed Tax is an additional tax on communication services rendered to the same end users who already pay a five percent (5 per cent) tax as VAT.

“Also the administration of this tax regime as proposed will be cumbersome and impractical. We must correct this general notion that service providers can absolve any tax without considering the capital and operational cost to the service providers,” ALTON leadership declared.

The group also underlined some affordability challenges in connecting the unconnected, adverse impact on telecom infrastructural development, as well as its impact on the national broadband plan.

According to ALTON, the broadband penetration remains low at less than 10 per cent, with the government setting a target of 30 percent by 2018, which is now being hindered by the debates on CST and its proposal.


“High consumer taxes on communication services would Impact negatively on economic and broadband development,” ALTON maintained.

Nenye Dom/GEE
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