Thursday, September 22, 2016

Nigeria looking to ease recession by taxing internet use

Making phone calls, surfing the web and watching TV in Nigeria could be about to become more expensive.

With national revenues shrinking due to the global crash in oil prices over the last couple of years, Nigeria has been forced to consider how to diversify its revenue sources. In a search for a new pot of gold, the government appears to have settled on squeezing its communications industry as lawmakers are discussing a bill to tax communications services, including phone calls, texts, internet data and cable television. Nigeria’s telecoms sector alone is responsible around 8% of GDP.

It’s not the first time the Nigerian government has been accused of leaning on its vibrant telecoms industry for new revenue. Late last year it fined Africa’s largest mobile operator, MTN, $5.1 billion for SIM card irregularities. Both sides settled in June for $1.7 billion.

Making phone calls, surfing the web and watching TV in Nigeria could be about to become more expensive.

With national revenues shrinking due to the global crash in oil prices over the last couple of years, Nigeria has been forced to consider how to diversify its revenue sources. In a search for a new pot of gold, the government appears to have settled on squeezing its communications industry as lawmakers are discussing a bill to tax communications services, including phone calls, texts, internet data and cable television. Nigeria’s telecoms sector alone is responsible around 8% of GDP.

It’s not the first time the Nigerian government has been accused of leaning on its vibrant telecoms industry for new revenue. Late last year it fined Africa’s largest mobile operator, MTN, $5.1 billion for SIM card irregularities. Both sides settled in June for $1.7 billion.

But amid Nigeria’s first recession in decades, low-income Nigerians are likely to be most affected. Ojobo Atuluku, country director of advocacy group, ActionAid says if passed, the bill and increased strain on low income Nigerians will be “akin to punishing the poor for the sins of the rich.

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