Bill for an Act to establish the Communication Service Tax, which was sponsored by a former Senate Leader, Ali Ndume, on Wednesday, passed its first reading at the Nigerian Senate.
The bill was introduced to replace the 2.2 per cent increase in the Value Added Tax being planned by the Federal Government.
Senator Ndume argued that increasing VAT by 2.2 per cent would have devastating effects on the economy, as it would raise prices of goods and services.
He added that the Communication Service Tax, which charges nine per cent on calls and data will ensure the distribution of wealth in such a way that it won’t affect the ordinary people.
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.
“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 service 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.”