The Federal Government has imposed a tax on telephone calls in the nation to fund free healthcare for vulnerable Nigerians.
This new tax is coming despite moves by telecom companies to increase the price of calls, SMS, and data by 40 percent as a result of an unfavorable operating environment.
The telecom tax, in the equivalent of a minimum of one kobo per second for phone calls, is a part of the sources of funds required to finance free healthcare for the Vulnerable Group in Nigeria, according to the National Health Insurance Authority Bill 2021 signed by President Muhammadu Buhari last week.
Under the new tax, the federal government will get a minimum of one kobo per second for phone calls It added that the Vulnerable Group Fund will subsidize the provision of healthcare to children under five, pregnant women, the aged, physically and mentally challenged, and the indigent as may be defined from time to time.
The Act includes a provision under Section 26 subsection 1c which states that one of the sources of money for the Vulnerable Group Fund shall include a telecommunications tax, not less than one kobo per second of GSM calls.
Speaking on the development via his Twitter handle, Taiwo Oyedele, fiscal policy partner and Africa tax leader at PwC, said the new telecommunications tax is equivalent to a 9 percent tax on GSM calls since call rates are charged at 11 kobo per second.
“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% tax on GSM calls,” his tweet reads in part.
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 subsidize the cost of provision of health care services to vulnerable people in the country.
For funding, the act provides several options such as a basic health care provision fund to the authority; health insurance levy; telecommunications tax, not less than one kobo per second of GSM calls; money that may be allocated to the Vulnerable Group Fund by the Government; motley 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.
But telecom subscribers under the aegis of the National Association of Telecoms Subscribers, have said they will reject this new move by the government.
The President of the association, Adeolu Ogunbanjo, said, “It is quite unfortunate that the government is viewing telecoms as a cash cow. We are saying. There is a lot of corruption in the system, and rather than curb that they want to focus on the telecoms sector. “What do they mean by vulnerable?
Vulnerable people in the nation are probably about 80 percent of the population; we are all vulnerable. What has happened to the health budget? Why should it touch telecoms again? The government should look elsewhere for money. This new action is only likely to impoverish more Nigerians and they are masquerading as helping the vulnerable. This is not right.”