Communication Service Tax can’t be a product of sound judgment

Isn’t it rather disappointing the argument put up by Nigeria’s Minister of Communications, Barrister Adebayo Shittu, that scarcity of funds is the reason the Federal Government is seeking to levy a nine per cent tax on users of telecommunication services as an alternative revenue source to shore up a dwindling revenue base?

The minister, who spoke at the stakeholder session organised by the Lagos Chamber of Commerce and Industry (LCCI), said that the proposed tax would fetch government an additional N240 billion ($761 million) annually to meet its projection for the 2016 budget.

How was a matter of such critical national importance arrived at? Is it not incumbent on a supposedly democratic government to look at all sides to the subject matter, its wider implications and how it would benefit or negatively affect the greatest number of people?

The controversial Communication Service Tax (CST) Bill currently being debated at the National Assembly is one serious matter that has not been thoroughly subjected to sound reasoning by its proponents.

While the sum is huge and the argument sounds logical to government, the anger trailing the CST Bill is an indication that the proposed tax was not informed by sufficient reasoning, consultation and research in the first place.

What a wrong time to impose more tax on the citizens that are battling for survival in an economy that is in recession. Reports from the Nigerian Bureau of Statistics (NBS) shows that about 1.5 million Nigerians became unemployed in the first quarter of 2016 and that the country’s unemployment rate grew from 10.4 percent in the last quarter in 2015 to 12.1 percent.

How then does this government expect a national workforce that is earning so little income to take additional nine per cent tax off their stipend? How much are the Nigerian workers left with to cope in an economy where inflation is at its all-time high at 17.1 per cent? How on earth will the poor masses, who struggled to send their wards to school, survive with CST when their children have only graduated into the unemployment market that has climbed to 26.06 million people?

Communication tax is definitely not the solution to government’s budget deficits. In a recent stakeholder session with finance and economic experts in Abuja, Mr. James Naiyeju, a former Accountant-General of the Federation, warned against increasing taxes. I am also aware that Mr. Bismarck Rewane, a popular economist also advised against increasing tax, he advocated instead that government improve collection as lower taxes encourage compliance.

It is clear those who have spoken up against this Bill such as GSMA and other bodies understand the import not only for businesses but on the service subscribers and most importantly the economy.

The CST Bill in all intents and purpose is anti-people; government should be very careful and not forcefully push it down the throat of Nigerians. The CST is punitive, discriminatory and arbitrary and should not stand.

 

Nosakhare writes from Benin City, Edo State, Nigeria.