The Spikes of 7.5% VAT Hit Subscribers As Ministry Orders Re-registration of SIM Cards

A few days after the implementation of the 7.5% VAT, the implication has hit home with increment in the cost of everyday services. Telecommunication is at the helm of services affected by the VAT increase. Subscribers are now being charged more for calls, data and SMS.

The chairman and head of operations of Telecommunication Operators of Nigeria (ALTON), Gbolahan Awonuga said the increment is as a result of the Financial Tax Bill signed into law by President Muhammadu Buhari late last year, which took effect February 1.

The ALTON boss said the 7.5% VAT will reflect in the cost of telecommunication products and services: The charges for data, text messages and phone calls will be increased as a result.

“Further to the assent of the Finance Bill by President Muhammadu Buhari, which reviewed the Value Added Tax from five percent to 7.5 percent, ALTON wishes to notify consumers that our members will begin applying the new rate on all purchased telecommunication products and services with effect from February 01, 2020,” the statement from ALTON said.

Reaction to this development by Nigerians has been scornful. At the introduction of the Financial Tax Bill and the increment of VAT from 5% to 7.5%, the Federal Government has promised that none of it will affect poor Nigerians. The Financial Tax Bill has excluded basic home items from VAT: Honey, bread, cereals, cooking oils culinary herbs, fish, flour etc. basic food items were exempted from the list to ensure that poor Nigerians don’t have to pay more with the little they are earning.

Apart from food, other items that were also removed from the taxable include locally manufactured sanitary towels, pads and tampons, services rendered by microfinance banks, tuition relating to nursery, primary, secondary and tertiary education.

However, the digital tax was not considered as a plight to the poor, and it has hit everyone to astonishment. Call charges have gone up as high as N35 per a minute and SMS is N4.10.

Poll conducted by the International Center for Investigating Reporting (ICIR) shows that about 70 percent of Nigerians out-rightly condemn the digital taxes. The tweets under 7.5% VAT trend on Twitter also show resentment toward it, especially from Lagosians who believe they have had enough with the Okada ban to be inflicted with more suffering.

Meanwhile, the federal government has directed Nigerian Communication Commission (NCC) to review its policy on SIM registration with immediate effect. The directive came from the Minister of Communication and Digital Economy Dr. Isa Ibrahim Pantami, who was represented by his Technical Assistant, Information Technology, Dr. Femi Adeluyi.

In a statement, the Minister said the need to revisit the SIM registration policy emanated from security reports after the SIM validation exercise carried out last year.

“The revision of the policy is based on the feedback received from the security agencies following the successful revalidation of improperly registered SIM cards in September 2019 and the blocking of those that failed to revalidate their SIMs,” Pantami said.

The policy update is expected to include new requirements. The NCC has been directed to ensure that new subscribers provide their National Identification Number (NIN) as a means of validation to register their SIMs. Foreigners are expected to provide their international passport and visa. All already registered SIMs are to be updated before 1st December 2020.

The new policy also stipulates that no subscriber should own more than three SIM cards, and no unregistered line should be allowed to be in use. The registration will be carried out by telecommunication operators while the regulator has been directed to make provision for subscribers to check their registration status, which includes checking the number of SIM cards registered to their name, the phone numbers and networks.

NCC is also required by the policy to ensure that operators develop cyber-attack resistant security measures that will protect subscribers’ data in line with the regulation of Nigeria Data Protection Regulation (NDPR). And to deactivate any SIM line that is caught doing something unlawful.

Dr. Pantami said the development has been in accordance with the constitution. Section 25(1) of the Nigerian Communication Act 2003, has empowered Ministers to “from time to time” offer policy direction and notify the regulator of his views in the communication sector.

However, the issue of SIM registration in Nigeria is becoming a cause for concern to subscribers who decry the periodic changes in policy that keep pushing them to re-register their SIMs. Experts have advocated a single database that will save the people the trouble of repeated SIM registration exercise.