The latest reaction to the decision of the Nigerian Senate to levy a 9% communication service tax on Electronic Communication Services came from Babatunde Fowler, chairman of the Federal Inland Revenue Service (FIRS). Fowler said there was no harm in introducing the tax.
He also went ahead to berate Nigerians for reacting to the decision of the Senate, saying they talk too much on the phone. He made this statement on the sideline to the media at the ongoing Nigerian Economic Summit Group conference holding in Transcorp Hilton in Abuja.
“I will put it this way, Nigerians talk a lot on the phone; they even talk more than is required, so for them to have capacity or revenue to talk that much, I don’t see any harm in paying a little bit more to government.
“We compare ourselves to developing countries but Ghana introduced a 2% education tax and used it to fund their universities and that is why Nigerians are now going to university in Ghana. They didn’t look for aid, they did it by themselves.”
[READ MORE: JUST IN: FIRS’ Fowler replies presidency over leaked memo]
He explained the decision of the FIRS to introduce VAT on online transactions. He said instructions had been given to banks to charge 5% VAT and remit it to the revenue service for people that make use of online facilities.
“By the VAT Act, the minister has the right to change the rate but this government, I believe wants to carry every stakeholder along including those in the house and explain to them that this increase is for the benefit of all Nigerians. And it will only apply to what I call privileged items like buying a car or lunch in an expensive restaurant. The money will help the state look after the needy among us.”
What you should know: At present, Nigerian lawmakers are proposing a 9% charge on telecommunication services in place of an increase in value-added tax from the present 5% to proposed 7.5% by the Federal Executive Council (FEC). The decision to move in this direction was pushed forward by the Chairman of the Senate Committee on Army, Senator Ali Ndume, who said the proposed VAT increase would affect ordinary Nigerians.
The communication service tax will be levied on Electronic Communication Services like Voice calls, SMS, MMS, and Data usage from Telecommunication Services Providers and Internet Service as well as Pay per View TV Stations.
[READ ALSO:10 Nigerian companies pay a combined N187.9 billion taxes in first half of 2019]
Ndume also said the Communication Service Tax was a way of distributing wealth in such a way that it would not affect the ordinary people.
I wonder which category of Nigerians accused of talking too much during phone calls. Is it the over 70% living on less than a dollar per day or is he referring to his circle of friends?
Truth be told, Nigerians talk too much on phone. The problem is not with collecting the tax. It is with the management of it. How much did we hear is allegedly missing at the FIR where the chairman is presiding? True or false, it is difficult to believe any denials from any of our leaders. Ghana used 2% VAT to fund education. But 1% VAT in Lagos alone, if properly collected and adminstered can fund a better education in Lagos and fifteen other states in Nigeria.
Our national treasury basket is leaking and cannot hold whatever amount of tax/ revenue that is brought into it as it is today.