FG moves to impose new tax regime on telephone calls

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A ploy to cater for the health needs of Nigerian citizens considered to be most vulnerable to health challenges, may see the Federal Government injecting a new tax on phone calls in the country, soon.

This is coming despite recent increment by telecommunication companies for the price of their services as a result of harsh economic operating conditions.

The new telecom tax which is coming in the equivalent of a minimum of one kobo per second for phone calls is meant to boost sources of funds required to finance free healthcare for the vulnerable group in Nigeria.

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The information was contained in the National Health Insurance Authority Bill 2021 signed by President Muhammadu Buhari recently.

The act includes a provision under Section 26 subsection 1c which states that the source of money for the Vulnerable Group Fund includes telecommunications tax, not less than one kobo per second of GSM calls.

The Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers, Taiwo Oyedele, said, “S.26 of this new law imposes a telecommunications tax of not less than 1kobo per second on GSM calls. With call rates at about 11kobo per second, this translates to a 9 per cent tax on GSM calls.

“The tax is one of the sources of money to the Vulnerable Group Fund to subsidise the provision of healthcare to the group defined to include children under five, pregnant women, the aged, physically and mentally challenged, and the indigent as may be defined from time to time.”

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According to the act, the Vulnerable Group Fund is money budgeted to pay for healthcare services for vulnerable Nigerians who cannot pay for health insurance in a bid to subsidise the cost of provision of health care services to vulnerable people in the country.

For funding, the act provides several options such as basic health care provision fund to the authority; health insurance levy; telecommunications tax, not less than one kobo per second of GSM calls.

It also stipulates that money that may be allocated to the Vulnerable Group Fund by the Government; mostly that accrues to the Vulnerable Group Fund from investments made by the Council;  and grants, donations, gifts, and any other voluntary contributions made to the Vulnerable Group Fund.

Also in the new act, every citizen in Nigeria is expected to obtain a health insurance policy.

The telecom operators also had cause to write to the Federal Government, through the Nigerian Communications Commission, on the conditions of the industry.

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The operators under the aegis of the Association of Licensed Telecommunication Operators of Nigeria had proposed a 40 per cent increase in the cost of calls, SMS, and data owing to the rising cost of service provision in the country.

Most mobile phone users have also observed the poor service provision from service providers, a situation many attribute to high cost of energy.

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