The Federal Government of Nigeria has slammed a new tax on phone calls in the country in order to fund free healthcare for the vulnerable group.
This is despite recent moves by telecommunications companies to raise their service prices as a result of an unfavorable operating environment.
The telecom tax of at least one kobo per second for phone calls is one of the sources of funds required to finance free healthcare for Nigeria's vulnerable population.
This is contained in the National Health Insurance Authority Bill 2021, which was signed by President Muhammadu Buhari (retd.) last week.
Section 26 subsection 1c of the act states that the source of funds for the Vulnerable Group Fund includes telecommunications tax, not less than one kobo per second of GSM calls.
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"S.26 of this new law imposes a telecommunications tax of not less than 1kobo per second on GSM calls," said Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers. With call rates of around 11kobo per second, this equates to a 9% tax on GSM calls.
"The tax is one of the sources of funds for the Vulnerable Group Fund, which is used to subsidize the provision of healthcare to the group defined as children under the age of five, pregnant women, the elderly, the physically and mentally challenged, and the indigent as defined from time to time."
The Vulnerable Group Fund, according to the act, is money budgeted to pay for healthcare services for vulnerable Nigerians who cannot afford health insurance in order to subsidize the cost of providing health care services to vulnerable people in the country.
The act provides several funding options, including a basic health care provision fund to the authority; a health insurance levy; a telecommunications tax of not less than one kobo per second of GSM calls; money that the Government may allocate to the Vulnerable Group Fund; 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.
According to the new act, every Nigerian resident is required to obtain health insurance.
Recently, telecom companies wrote to the Federal Government about industry conditions via the Nigerian Communications Commission.
As a result of the rising cost of operating in the country, the operator proposed a 40% increase in the cost of calls, SMS, and data under the auspices of the Association of Licensed Telecommunication Operators of Nigeria.
