- Stamp Duties on Electronic Transfer Receipts via NIBBS can finance National Cyber Security Fund, industry sources
By Oluwatobi Opusunju
Telecoms’ consumers in Nigeria may soon experience price hike in data and voice call tariffs. Operators are blaming a recent directive to banks by the Central Bank of Nigeria (CBN) asking banks to deduct a 000.5% tax on all electronic transactions in the country. The tax is intended to finance the National Cyber Security Fund (CSF) within the CBN in line with the 2015 Cybercrime Act.
But the Association of Telecommunications Companies of Nigeria (ATCON) has warned that government’s strategy to finance the CSF will impact negatively on consumers and operators. Implementation of the CBN’s directive would mean all telecommunication companies including GSM service providers and Internet service providers will be affected.
According to industry sources, government already makes well over seven trillion naira as Stamp Duties on Electronic Transfer Receipts through the Nigerian Inter Bank Settlement System (NIBSS) which could serve as a ready source of funding the CSF.
The market, already over-taxed, will shrink, a concerned ATCON had warned in a recent statement issued in Lagos. Nigerians should forget real growth in the telcos sector or the fledgling ecommerce sub-sector. ATCON had stated:
“The Cybercrime (Prohibition, Prevention, Etc) Act 2015, Section 44 that the CBN seeks to implement, states in Section 44 an establishment of a National Cyber Security Fund. In Section 44.2 (a) a Levy of 0.005 of all electronic transactions by the businesses specified in the second schedule to this Act. Where in the Schedule five categories including GSM Service providers and all telecommunication companies and Internet Service Providers are to apply this charge.”
For many stakeholders, not only e-commerce and FinTech companies will suffer but the entire spectrum of telecoms industry and sectors driven by ICT including companies insurance companies, Nigerian Stock Exchange and a host of others.
ATCON, the umbrella body for all telecom companies said, telcos are being overtaxed already by all tiers of government and if the government goes ahead with the proposed levy, operators may be forced to raise the price of talk and data services to augment the profit margins the move will create; thereby affecting consumers and hampering productivity in the country.
“We therefore advise government review this directive as it would affect some macro-economic elements such as loss of employment and we as industry will have to increase prices to cover the collection, processing and pass on these costs to the 150million subscribers,” said ATCON.
As at first quarter of last year, the value of fund transfers that passed through the NIBSS Electronic Fund Transfers (NEFT) and National Instant Payment (NIP); the two major platforms used for electronic transactions, were in excess of N322.47 trillion and attracts considerable stamp duties into government coffer.
“Government should be more creative in addressing issues in the industry and not just seeking to make money off investors or ordinary consumers,” one operator told IT Edge News in Lagos.