ComTech minister: Appropriate legislation critical to telecom sector growth

By Kokumo Goodie, Lagos, Nigeria

Nigeria’s Communications Technology Minister Adebayo Shittu, has said appropriate laws will be made to guarantee the consolidation of the gains of the telecoms industry. He added that the Federal Government was determined to provide the enabling environment for ICT and telecoms sector growth via the enactment of relevant legislations.

While soliciting the support of stakeholders in making the Government and Governance SMART, and a Government where all will have ubiquitous access to ICTs, the minister called on stakeholders in the communications sector to have a holistic deliberations on the communication services tax as being proposed in the Communication Tax Bill pending before the National Assembly.

He spoke at the Communication Services Tax Stakeholders’ Meeting organised by the Lagos Chambers of Commerce and Industry (LCCI) in Lagos, adding that “this is necessary in order to weigh the effects of the proposed tax regime on the government, stakeholders as well as end users of communication services.”

He called for a juxtaposition of new tax regime with existing ones saying that the introduction of new taxes without harmonizing existing ones will put pressure on the Nigerian tax system, thereby making it unattractive to investors and may consequently be counter-productive in the long run for the nation’s targets on broadband penetration.

The ComTech minister who spoke extensively on controversies surrounding the proposed bill said a section of the stakeholders have extrapolated that the Bill seeks to impose additional nine per cent charges on users of electronic communication services which is to be remitted to the Federal Inland Revenue Service on a monthly basis. More so that the extra tax will be applied on voice calls, SMS, MMS, Data and Pay TV viewing, among other services.

Shittu said others have posited that over 60 million Nigerians would be unable to afford basic broadband connection, a situation that is likely to threaten Nigeria’s ability to achieve its goal of 30% broadband penetration by 2018 and also undermine the socio-economic progress spurred by increased connectivity. This to a large extent will be a cog in the wheel of implementing the National Broadband plan.

He added that many have also concluded that the proposed Bill will also discourage further investment in the communication industry due to reduced Returns on Investment, and ultimately drastically reduce the sector’s huge contributions to the national GDP. Some have concluded that the proposed CST Bill is an ill wind that would blow the country no good.

“My focus on any tax regime will be to align any process that will stimulate the economy and also ensure that the tax system is efficient by widening the tax net and creating an effective framework for tax compliance to protect the poor and vulnerable in the society who nonetheless have to use telecom services for social inclusion and financial services among others.

“The ITU gave Nigerian the mandate to achieve 30% broadband penetration by 2018. This is only two years away. In spite of the huge investment by the government and industry operators, Nigeria has achieved only 10% broadband penetration at the moment. If we are to catch up with lost ground and meet up with the expectations of the global community in the area of affordable broadband service, we have to incentivize the populace by helping to aid access to low cost data service subscription,” he said.

He however said that this Bill is discriminatory because it targets only the communication industry to the exclusion of other sectors of the economy, saying: ”they reckon rather than overtax an already overburdened industry and its populace, government needs to stimulate the economy and encourage the adoption of communication service by all – whether rich or poor.

“In the same vein, our appetite as a Government to increase revenue makes this bill worthy of our consideration as I have been reliably informed that the projected earnings from this effort is over N20 billion naira every month, which is an attraction to the Government in funding our budget deficits. I must be quick to say that this Government has got a human face twined around its decisions.”

The goal of the ministry, according to Shittu , is to provide cost effective ubiquitous ICT access for overall national development.  He said the proposed solutions are the passage of the Critical National ICT sector infrastructure bill, hastening of the rollout of metro fibre networks, use of NIGCOMSAT Satellites to bridge the rural penetration gap and hosting of critical National Data within the country.

The proposed National ICT Roadmap, according to him, is poised to set out the intent and commitment of the Government to continue the development of the ICT sector and to implement the sector policies and plans in an integrated, focused and innovative manner that aligns with the Change Mantra of the current administration, adding that it focuses on five strategic pillars namely; Governance, Policy, Legal and Regulatory Framework, Industry & Infrastructure and Capacity building. It also identifies strategies to address some cross cutting issues.

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