Alliance for Affordable Internet (A4AI), has advised the Nigerian government not to pass its Communication Service Tax (CST) Bill into law.
The body in its review of the bill said the nine per cent tax being proposed on communication services would jeopardise the country’s target of 70 per cent broadband penetration by 2025.
While telecom operators in the country had also condemned the bill, saying it would lead to an increase in the cost of data and voice call for the subscribers, A4AI in its report of an assessment of the bill said: “CST Bill might impede telecoms service delivery to the people, and also likely to negatively affect increased broadband penetration as a result of increased charges.”
“The CST will effectively increase the cost of operations for all such businesses. The affected services will either become more expensive for consumers, or the providers will charge the same rates while absorbing the tax, as was the situation in Ghana until last month,” it added.
Noting that the Central Bank of Nigeria (CBN) and its partnering institutions were betting on Nigeria’s impressive mobile penetration number, which stood at 203 million as of August to widen the financial inclusion net, the group said this would also be affected by the CST.
“The Communications Tax Bill would put the economic impact of mobile services at risk,” it added.