Federal Government adds new tax on telephone calls

federal government adds new tax on telephone calls
federal government adds new tax on telephone calls

To provide free healthcare for Nigeria’s Vulnerable Group, the Federal Government has imposed a new fee on telephone calls.

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

Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers, stated:

“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, including the basic health care provision fund; 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; money that accrues to the Vulnerable Group Fund from investments made by the Council; as well as grants, donations, gifts, and any other voluntary contributions made to the Vulnerable Group Fund.