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New digital taxes will make Internet inaccessible -Experts

Stakeholders in the telecoms industry have warned that the imposition of three new digital taxes on the operations and services of technology and telecommunications companies will hinder Nigerians’ access to the Internet.

During a virtual discussion themed ‘ Impact of Communication Service Tax on Affordable Internet’ on Tuesday, they said the cost of these taxes in addition to 39 existing taxes that telecoms companies had been subjected to would be transferred to customers.
This move, according to them, will make data services less affordable for most Nigerians.

The Nigerian Coordinator, Alliance for Affordable Internet, Olusola Teniola, identified the new taxes as nine per cent Communications Service Tax, 0.005 per cent cybersecurity levy and digital taxes for foreign companies with Significant Economic Presence in Nigeria.

These new financial obligations, according to him, will discourage more Nigerians from coming online, make connectivity more expensive, and deter foreign investors.

Teniola said even though not much had been discussed by the Senate on the planned CST, stakeholders needed to devise strategies to ensure that these taxes, especially CST, were not introduced.

“There has been a cybersecurity levy that has recently been drawn to our attention. We received communication that they want to really effect the 0.005% levy to every electronic transaction. So, this also applies to telecom operators, Internet Service Providers, Nigerian Stock Exchange, insurance companies,” Teniola added.

He said the cybersecurity levy would be imposed on companies that facilitate and conduct online transactions.

A4iA coordinator noted that the government was committed to fighting cybercrime and needed to build a structure to achieve its plans, hence the imposition of 0.005 per cent levy on operations of companies.

In his comment, the Head of Operations, Association of Licensed Telecommunication Operators of Nigeria, Gbolahan Awonuga, stated the notion the telecom company were generating a lot of revenue had turned the telcos a cash cow for the government.

Unfortunately, he said the cost of new taxes would be transferred to subscribers, adding that it would affect the price of data and call tariff.

According to him, the new taxes will cause a drawback to some government initiatives aimed to improve ease of doing business as well as financial inclusion target.

Idris Ajibade of Fitila Africa called on the government to reconsider the introduction of these taxes if it intended to reach more people with financial services and double the number of telecoms subscribers.

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