Friday Udoh, the Chief Coordinator, Institute of Chartered Economists of Nigeria, South-South, have faulted the move by the Federal Government to tax social media companies in Nigeria.
He also picked holes in the experts support for the tax,saying it was subjective and misleading.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, had recently hinted at the introduction of new tariffs and levies as the nation’s economy continues to recover in 2022.
Udoh,in an email to PremiumNews,said the proposed tax was unnecessary since telecommunication operators pays licences fees to government.
Government,he said,earned from other charges and income during the performances of the deal, excluding incomes from fines/penalties.
He said:”Yes, consumers need a better service at the same time the operators are operating in break and quench mode because, it is the problem of the people and not government. Rather than placing penalties on the operators, a source of income for government they will look the other side.It is true that consumers with recharge card/ token purchases paid same with VAT inclusive. This gives them an unfettered access to internet. If the government could not bargain with Mark Zuckerberg to share the profits he earned through Nigeria’s market . It should not push it to the citizens.
“To the same extent, public policy formulations must take people at the the center, the beginning of an end. This means that citizens must be fully involves in every policy making.
Public policies has processes, it has never been push and start process. It is fundamentally wrong adopting a policy without building on the prerequisites parameters and subjected same for empirical analysis for a best options.
“The question is:How could the supposedly experts, Teniola and Adeolu Ogunbanjo give a fare view on policies that is not formulated, not in existence and evaluated to establish the social and economic impact on the society, people and the economy?.I know how robust and rigorous policy formulation processes is in European Union.Besides, not all policies are evenly implemented in EU because of differences in social and economic behaviours of some of the members states.
“Comparing Nigeria with EU or Ghana is very wrong because Nigeria is a country of its own with many difference in economic, social, demography and lots more.To my understanding, the contributions from these guys is misleading otherwise too subjective for an informed decision”
Experts in the telecommunication industry had said the move by the Federal Government to tax social media companies is right because the companies generate commercial revenues from the nation.
The National Coordinator, Alliance for Affordable Internet, Olusola Teniola, had noted that the move by the Federal Government was aimed at increasing its revenue through taxes.
He said, “It is all under the auspices of the government trying to increase its revenue. There has been a debate even amongst the OECD countries, as to how they can achieve taxation of digital companies.
“And there has been an agreement that there should be an adopted taxation model. The issue here is that Africa is the weaker partner under the OECD countries. So, when the developed countries that form part of the OECD agreed to tax up to about 15 per cent of revenue generated from their countries, they didn’t consider revenues generated from African countries.
“So, each country is having to devise a method as to how it can estimate the amount of taxation due to them from the transactions made on these platforms. Recently, there has been an agreement that any transaction on these platforms will attract a levy.”
According to Teniola, Nigeria’s approach is very similar to that of Ghana.
He said since the VAT would naturally be transferred to the consumer, a way to cushion this impact, especially as the increase in digital transactions would continue, had to be adopted too.
The President, National Association of Telecoms Subscribers, Adeolu Ogunbanjo said, “One of the things the Federal Government has said to social media companies is how to tax them. Facebook is being used for adverts, commercially, which calls for some sort of taxes, which of course is one of the duties of this government: to widen the tax net.
“However, because we are using it for advertising, I think this move is only right. And we have been informed by the way. They’ve carried us along – which is one of our rights – that there would be tax and that they are negotiating with the owners of these social media companies. I think it is alright as the Federal Government would have more revenue.
“We need to wait and see how the tax would be implemented first before we criticise this move.”
