ATCON: Communications Tax will Suppress Telecoms Market

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The Association of Telecommunications Companies of Nigeria (ATCON) has warned that Nigerian Telecommunication market may experience less boom and activeness if government succeeded in implementing the proposed nine per cent communication service tax.

While the bill for the proposed tax had scaled first reading in the National Assembly, the telecommunications body urged government to drop the bill stating that the consequences would outweigh the expected gains.

Highlighting the effect of the tax which seeks to impose additional charges on users of electronic communication services, President of ATCON, Olusola Teniola, noted that in economic sense, the action would affect the purchasing power of consumers and thus, reduce subscribers’ consumption of data and the length of time spent on voice calls; and in effect, dwindle the revenue that accrue to telecoms companies.

Shedding more light, the telecommunication guru who described the proposed tax as not being investment friendly held that it would scare investment away from the sector and make it less attractive , since investor were encouraged by a friendly tax regime.

He added that the tax, if eventually introduced would kill creativity and innovations in telecommunications business.

“We consider the proposed tax bill unnecessary and prohibitive because operators in the sectors are already faced with multiplicity of taxation. Imposition of this bill could stifle innovation and creativity in the sector and this would automatically reverse the gains already made in the past decade. This might lead to increase in unemployment, decrease in revenue accruable to government which would heighten the county’s poverty level”, Teniola pointed.