Phone Tax

What You Need To Know About New Phone Tax

Phone Tax

Federal Government Set Up Phone Tax, See How It Affects The Health Sector

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The Federal Government of Nigeria has set up a phone tax to boost the health sector.

President Muhammadu Buhari-led administration disclosed this in Nigeria’s latest health insurance law.

In the recently passed National Health Insurance Authority Bill 2021, the Federal Government approved the taxing of telcos to fund health insurance for vulnerable Nigerians.

In section 26 subsection 1c of the law, the source of money for the Vulnerable Group Fund includes telecommunications tax, not less than one kobo per second of GSM calls.

The Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers, Taiwo Oyedele explained the new law.

He 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.”

Phone Tax: What is the Vulnerable Group Fund

The act says the Vulnerable Group Fund is money budgeted for healthcare services for vulnerable Nigerians. Vulnerable Nigerians are those who cannot afford to pay for health insurance. The VGF subsidizes the cost of health care services for vulnerable people.

Akintade spoke on how vulnerable people can be identified. He said such persons should register with the National Population Scheme. He emphasized that this is important so that they would be taken care of by the Federal Government.

He warned against abusing the initiative as this is targeted at vulnerable persons.

His words:

 “It is the responsibility of the government to provide health services. One thing is to provide the health services with another thing is to be able to afford the health services.

“You don’t want a country where everybody will be a vulnerable person, it is not correct. There are a lot of physically challenged people that can pay for their health because they have the funding, so people have to be honest.

“What is causing depletion in funding is when people are not honest – when you can afford and you are saying you cannot afford. So, if you have been empowered to a certain extent, you don’t need public funding, then you can afford to pay for it your healthcare.”
Source: PUNCH HealthWise

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