As the Communication Tax Bill passes first reading at the National Assembly, the chairman of the Federal Inland Revenue Service (FIRS), Babatunde Fowler, has said that there is nothing wrong with introducing the tax.
TheCable reports that Fowler said this, on Monday, in Abuja at the ongoing Nigerian Economic Summit Group conference
According to him: “I will put it this way, Nigerians talk a lot on the phone; they even talk more than is required so for them to have capacity or revenue to talk that much, I don’t see any harm in paying a little bit more to government.
We compare ourselves to developing countries but Ghana introduced a 2% education tax and used it to fund their universities and that is why Nigerians are now going to university in Ghana. They didn’t look for aid, they did it by themselves.”
At present, lawmakers are proposing a 9% charge for using telecommunication services in place of a 2.2% proposed increase in value-added tax being proposed by the federal executive council (FEC).
Explaining plans by the FIRS to introduce VAT on online transactions, Fowler said: “All we are saying is that those who use online facilities, we will give instructions to the banks that once they make the payment, they will just charge 5% VAT and remit it as an agent to FIRS.
“By the VAT Act, the minister has the right to change the rate but this government, I believe wants to carry every stakeholder along including those in the house and explain to them that this increase is for the benefit of all Nigerians. And it will only apply to what I call privileged items like buying a car or lunch in an expensive restaurant. The money will help the state look after the needy among us.”
The federal government is making efforts to shore up revenue and improve the country’s fiscal health.
The Communication Service Tax Bill provides that the rate of the tax is 9% of the charge for the use of the communication service. It’d replace the 2.2% proposed increase in value-added tax being proposed by the federal executive council (FEC).
