The Senate, yesterday, passed for first reading a bill for an Act to introduce tax on Communication Services and Cable television services.
The proposal, entitled “A Bill for an Act to establish the Communication Service Tax” was sponsored by a former Senate Leader, Ali Ndume.
The bill was introduced to replace the 2.2 per cent increase in the Value Added Tax being planned by the Federal Government as announced by the Finance Minister, Zainab Ahmad, recently.
Ndume told journalists shortly after the first reading of the Bill that the imposition of tax on communication service was a better way of distributing wealth in such a way that would not affect the ordinary Nigerians.
He explained that increasing VAT would have very bitter consequences on the economy, saying that it would lead to a hike in the prices of goods and services and take them beyond the reach of the ordinary people.
The bill provides the charging of 9 per cent on calls and data usage and the pet view cable subscribers.
The Bill reads in part: “There shall be imposed charge 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.
“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.
“The tax shall be levied on such Electronic Communication Services like Voice Calls; SMS; MMS; data usage both from telecommunication services providers and Internet service as well as Pay per View TV Stations.
“The tax shall be paid together with the electronic communication service charge payable to the service provider by the consumer of the service.
“The tax is due and payable on any supply of electronic communication service within the time period specified under sub-clause (5) of whether or not the person making the supply is permitted or authorized provider of electronic communication services.”
The bill stipulates that the Federal Inland Revenue Service (FIRS), established under Section 1 of the Federal Inland Revenue Service (Establishment) Act, 2007, would be responsible for collection and remittance of tax, any interest and penalties.
It added he that the FIRS shall pay the tax collected together with any interest and penalty into the Federation Account.
The bill further stated that all service providers shall file a tax return to account for the tax.
The legislation further read, “The tax return shall be in a form prescribed by the FIRS and shall state the amount of tax payable for the period and any related matters that may be required.
“The return and the tax due to the accounting period to which the tax return relates shall be submitted and paid to the FIRS not later than the last working day of the month immediately after the month to which the tax return and payment relates.
“The FIRS may extend the period within which the tax return may be submitted and payment made on application in writing by a service provider, where good cause is shown by the applicant.
“The extension shall be communicated to the applicant in writing and shall state the circumstances under which the tax return shall be submitted for the particular period.
“A service provider who without justification fails to submit to the FIRS the tax return by the date is liable to a pecuniary penalty of N50, 000 and a further penalty of Nl0, 000 for each day the return is not submitted.”