Federal Government Adds New Tax On Telephone Calls

President Muhammadu Buhari

The government of President Muhammadu Buhari disclosed it has imposed a new tax on phone calls across all networks in Nigeria.

The Federal government claims the added tax would be used to fund free healthcare for the Vulnerable Group in Nigeria.

The telecom tax in the equivalent of a minimum of one kobo per second for phone calls is captured in the National Health Insurance Authority Bill 2021 signed by the President Buhari last week, as one of the sources of funds required to finance free healthcare for the Vulnerable Group in Nigeria.

The Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers, Taiwo Oyedele, said; “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 per cent tax on GSM calls.

“The tax is one of the sources of money to the Vulnerable Group Fund to subsidise the provision of healthcare to the group defined to include children under five, pregnant women, the aged, physically and mentally challenged, and the indigent as may be defined from time to time.”

The act provides several options such as 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.

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Every resident in Nigeria is expected to obtain health insurance under the new act.

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