A bill for an Act to tax communication and cable television services has scaled first reading at the Senate.
The Bill for an Act to establish the Communication Service Tax was sponsored by a former Senate Leader, Ali Ndume.
Briefing journalists shortly after the first reading of the bill was taken by the Senate on Wednesday, Ndume posited that taxing 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 severe effects on the economy as it would lead to increase in prices of goods and services.
The bill stipulated a 9 per cent charges on calls and data usage.
Recall that the Federal Government had proposed a 2.2 per cent increase in the Value Added Tax from 5 per cent to 7.2 per cent.
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.
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“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 specified that the Federal Inland Revenue Service would pay the tax collected together with any interest and penalty into the Federation Account.
Furthermore, the bill stated that all service providers shall file a tax return to account for the tax.
