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Thursday, February 27, 2020

7.5 % VAT Increase: Nigerian Senate Says lt ls Skewed Against The Poor

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By Kunle Akinsola

 

There are indications that the Nigerian Senate may reject the proposed 2.2 per cent raise in the Value Added Tax (VAT) being planned by the Federal Government putting at 7.5 per cent.

 

The senators described the raise as sskewed against Nigerians.

 

The Minister of Finance, Mrs Zainab Ahmad, had announced an increase from the current 5 per cent to 7.5 per cent.

 

In the alternative, the lawmakers are planning a law  to impose a tax on Communication Services.

 

The Bill for an Act to establish the Communication Service Tax was formally introduced on the floor of the Senate on Wednesday by former Senate Leader, Ali Ndume.

 

Senator Ndume, who spoke with newsmen after Senate plenary session described the VAT as skewed against ordinary Nigerians.

 

He said the Communication Service Tax was a way of distributing wealth in such a way that it would not affect the ordinary people.

 

According to Ndume, the VAT increase will ultimately create “”grave discomfort” for larger percentage of Nigerians as the prices of good and services were bound to hit the roof.

 

The proposed Communication Service Tax Bill provides that the rate of the tax is 9% of the charge for the use of the communication service.

 

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 Bill further stated that “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 Bill provided that 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.

 

When passed, the bill shall compel that the tax shall be paid together with the Electronic Communication Service charge payable to the service provider by the consumer of the service.

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