If Senator Ali Ndume is really looking to shield the poor from unfair taxation, would it not be more effective if he backs the VAT, which proposes to charge 7.5 per cent on luxury items to be majorly borne by the middle class and rich, rather than the CST which would be 9 per cent and be equally shared among the rich and poor?


On October 2, the Communication Tax Bill 2019 (SB.12) sponsored by Senator Ali Ndume, chairman of the Senate Committee on Army passed its first reading at plenary.

If the bill succeeds, the tax would be levied on electronic communication services such as voice calls, SMS, MMS, data usage, pay per view TV stations etc., at the rate of 9 per cent.

The implication of this is that for service providers to remit this levy to the Federal Inland Revenue Service (FIRS), they have to charge consumers of these services the equivalent of 9 per cent extra for their usage of any of the listed services.

In plain terms, if you paid N100 for four minutes of a locally placed voice call, when this bill is passed into law, you would be paying N109.

The lawmaker explained that this bill was proposed as an alternative to the increase in the Value Added Tax (from 5 per cent to 7.5 per cent).

He explained that this increase was ill-timed as it is coming at a time when a lot of Nigerians are facing hard economic realities, especially after the country recently being named the poverty capital of the world.

In his words:

“Tax those who can afford the tax.’

‘If you are rich, you should pay more; if you are poor, you should pay less”.

While some have described this as a discriminatory tax or an attack on the rich, others have described it as the ‘hypocritical tax’.

While the senator has presented his argument as a fight for the welfare of the poor, however this bill reeks of ill-advice and lack of adequate research.

It would seem that a poor man is, to a large extent, excluded from paying the VAT as he normally cannot afford the luxury of such purchases. This would mean that the VAT ordinarily affects the middle class and the rich in society.


In June 2018, PREMIUM TIMES reported that Nigeria’s mobile phone penetration had hit 84 per cent, which means that well over half of the country’s population have access to mobile phones.

It means that the average Nigerian, rich or poor, will have to pay 9 per cent more than they used to for communicating and telephone services.

However, the VAT, which is being challenged, is to be increased from 5 per cent to 7.5 per cent. It is necessary to remind us here that VAT is charged only on luxury items e.g. shopping at a supermarket or eating at a restaurant.

It would seem that a poor man is, to a large extent, excluded from paying the VAT as he normally cannot afford the luxury of such purchases. This would mean that the VAT ordinarily affects the middle class and the rich in society.

Now, back to the proposed Communications Service Tax (CST). It is not uncommon to find the young man helping to lift heavy purchases in the markets with a mobile phone or even a beggar on the streets, because communication is a basic need.

They might not have the luxury of smartphones but they would have a basic one, which they can make and receive calls from.

This would mean that if this bill is passed, they would be required to pay more for something as basic as communication.

If Senator Ali Ndume is really looking to shield the poor from unfair taxation, would it not be more effective if he backs the VAT, which proposes to charge 7.5 per cent on luxury items to be majorly borne by the middle class and rich, rather than the CST which would be 9 per cent and be equally shared among the rich and poor?

It seems more reasonable that if one belonged to a class of people who receive a backlash daily over exorbitant salaries and allowances and exotic cars, while majority of their country’s population lack access to basic needs and wallow in abject poverty, and such a person really wanted to help people on the other side of the spectrum, he would propose to his fellow comrades in ‘bourgeoisie-dom’ that they cut down on their robust allowances than to propose a tax that would further burden the people he claims to care about.

Finally, it is almost inevitable that the poor would be hurt, the question is to what extent?

Jayne Augoye writes from Lagos.