ICT tax bill to hamper 30% broadband penetration in Nigeria

There is an anxiety that the Information Communications Technology (ICT) Tax Bill may threaten the 30 per cent broadband penetration target from its 10 per cent in Nigeria if it is passed into law.

There has been a debate at the National Assembly over the passage of ICT tax bill.

The bill said that a 9 per cent tax would be levied on communication services consumers, while tax would be collected alongside the existing 20 per cent tax levied on subscriber identification module (SIM) cards.

It was learnt that the law would increase the cost of internet connection across the country and slow down the progress of Nigeria achieving its 30per cent broadband penetration target by 2018.

Data released by Nigerian Communication Commission (NCC) explained that internet subscriptions grew by 5per cent y/y to 92.3 million in May. This represents a density of 50 per cent, placing Nigeria well above the African average of around 16 per cent as estimated by McKinsey.

Also, a study carried out by the World Bank explained that a 10 percentage point increase in fixed broadband penetration would increase GDP growth by 1.38per cent in developing economies.

The latest subscriber statistics from the regulator show MTN and Globacom accounting for 36 per cent and 29 per cent of active internet subscriptions respectively.