ALERT: You may start paying tax on SMS, data — in place of VAT increase

The senate has introduced a bill which seeks to impose a tax on all communication services including electronic messaging and data usage.

The ‘Bill for an act to establish the communication service tax’ introduced for first reading during Wednesday’s plenary session, recommended a 9% charge for using the service

It specifically provides that such tax shall be levied on electronic communication services such as voice calls, SMS, MMS and internet data usage both from telecommunication services providers and internet service.

Ali Ndume who sponsored the bill said if passed, the levy will replace the 2.2% increase in value-added tax which the federal government recently proposed.

The federal executive council (FEC) had approved an increase in value-added tax (VAT) rate from 5% to 7.2%.

However, this is subject to an amendment of the VAT act of 1994 by the national assembly.

Briefing journalists after the plenary session, Ndume said rather than increasing VAT, the communication tax would distribute wealth more equitably.

“There shall be imposed, charged payable and collected, a monthly communication service tax to be levied on charges payable by a user of an electronic communication service other than private electronic communication services,” Guardian quoted Ndume as saying.

“The tax shall be levied on electronic communication services supplied by service providers.

“For the purpose of this clause, the supply of any form of recharges shall be considered as a charge for usage of electronic communication service.”