Ahead of the June 1 takeoff date for the implementation of 5 per cent duty on recharge cards and vouchers, telecommunication service providers under the aegis of Association of Licensed Telecommunication Operators (ALTON), has called on the federal government to drop the tax which falls in the category of taxes known as ‘núisance tax’.
Chairman of the association, Gbenga Adebayo, who made the call when he was a guest on Channels TV breakfast show, Sunrise, lamented that telecommunications operators already had 36 levies and taxes and an additional 5 per cent tax will put further pressure on operations.
Nuisance tax is a tax imposed as a percentage of the selling price of goods or services, payable by the customer and transmitted by the seller to the taxing authority.
President Muhammadu Buhari had approved the collection of five per cent excise duty on telephone recharge cards and vouchers, which is expected to take effect on June 1.
Adebayo said: “The behaviour of government is not helping things for anyone. As at today, we have about 36 levies and taxes against operators. An additional 5% excise tax has now been considered effective for the first of June. All of these affect the sector, and that’s why we want the regulators to see that this is where we are.
“Regulators should look at the challenges that we are facing. Government should intervene where they can intervene and I must say not in the way of a bailout but to use the regulatory instruments to get what we want for us.
“The sector should be declared as national critical infrastructure. When this is done, it becomes important like the oil and gas sector across the country. We’re saying any negative impact on the telecommunication sector will affect the entire economy.
“There are levies and taxes defined in the statutory law, we have no objections to those ones. The nuisance taxes are the ones that are problematic. If the government says they will charge effluent discharge tax on operators, what is that, we are not an oil service company. What is environmental sanitation tax on telecommunication companies?”
