Call Tax: Federal Government Sets Up New Tax
The Nigerian federal government has introduced a new type of tax on phone calls in order to fund the provision of healthcare to vulnerable Nigerians who are not able to afford the cost of medical care.
President Muhammadu Buhari stated that the National Health Insurance Authority Bill 2022 will ensure the coverage of 83 million Nigerians who cannot afford to pay for insurance premiums.
According to a survey done by NOI Polls, approximately 8 out of 10 Nigerians do not have health insurance coverage and most Nigerians usually pay cash whenever they have to visit a hospital for medical treatment. This new law creates a vulnerable group fund that will be financed through a new telecommunications tax that is charged on phone calls at not less than one kobo per second of GSM calls.
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It will also be funded through a basic health care provision fund, health insurance levy, special intervention fund, as well as any investment proceeds, donations and gifts given to the authority. With an average call rate of 11 Kobo per second, the new law implies that there will be at least 9 percent charge on every second of phone calls in the country.
The vulnerable group comprises children under five, pregnant women, aged, physically and mentally challenged persons, and indigent people as may be defined from time to time. Section 26 of the bill states that the government will raise the funds for groups through various measures but the sources can be reviewed by the Council.
The new act requires every resident in Nigeria to obtain health insurance. The implementation of the law will likely see an increase in call tariffs as phone companies are likely to transfer to cost on users.
In April, Telecoms operators had proposed a 40 per cent increase in call and SMS tariffs, citing rising cost of operations and inflation as major drivers for the hike. The group said that the fee for calls would increase from N6.4 to N8.95 while the price cap for SMS will increase from N4 to N5.61.
The Nigerian Communications Commission has stated that it did not approve any hike in call fees and would only take a decision after reviewing the prevailing cost of operations in the industry.
