"CBN Governor's 3 Minutes Call Tax Is Economically Wrong" - Telecom Companies

The Association of Telecommunications Companies of Nigeria (ATCON) has described CBN Governor Godwin Emefiele’s suggestion of three-minutes’ call surcharge on telecommunications consumers as economically wrong.

ATCON President, Mr Olusola Teniola, told newsmen in Lagos on Saturday that the proposal was technically and economically wrong.

The News Agency of Nigeria (NAN) reports that Emefiele had suggested that government should impose taxes on phone conversations that lasted more than three minutes as an alternative source of revenue for it.

Emefiele suggested this option during the 2016 Annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN).

He also suggested the introduction tax on properties as a way of increasing revenue for the government.

Teniol said that the stakeholders in the telecommunications industry were not consulted on the issue before the pronouncement.

“Contrary to the CBN governor’s believe, it is the poor people who make more calls than the rich.

“So, the proposal is not targeted at the middle or higher class.

“I have not seen any industry where you don’t want people to use your products or services more.

“We want people to be speaking longer,’’ he said .

Teniola said that the CBN governor’s proposal that people should cut their phone calls after three minutes had not been founded on any theory.

“In fact, you will now see that people will be cutting their calls.

“It does not make sense, not only technically but economically, to apply that kind of thinking as a tool or solution out of the present economic recession, it is not going to work,’’ Teniola said.

He said that ATCON had already proposed to the Senate a one per cent VAT increase across all sectors.

“This is a more realistic measure toward getting more revenue for the government,’’ Teniola said.

The ATCON president said that the ICT industry had been envisaged to help the country gets out of recession.

“But the sector should not be killed with over taxation,’’ he said.

He suggested other ways the country could raise additional revenue to finance the increased expenditure that could engender fast and sustainable growth of the economy.

“I think we can consider introducing a negligible telecom surcharge to be entirely borne by the initiator of a call in order to protect the poor and vulnerable amongst us.

“ We could structure it to only take effect after the third minute of talk.

“Some analyses have indicated that the government could earn about N100 billion per annum from this alone.

“Obviously, this surcharge will mainly be borne by middle and upper class people since I do not know many poor people who make calls for more than three minutes,’’ he said.