Nigerian Govt Sets Up New Phone Call Tax

The government plans to use the tax to fund healthcare services to vulnerable Nigerians.

The Nigerian government has introduced a new tax on phone calls to fund the provision of healthcare to vulnerable Nigerians who cannot afford the cost of medical care.

President Muhammadu Buhari said the National Health Insurance Authority Bill 2022 will ensure coverage of 83 million poor Nigerians who cannot afford to pay premiums.

About eight out of 10 Nigerians do not have health insurance cover, according to a survey by NOI Polls, and most Nigerians pay cash when they have to visit a hospital for treatment.

The new law creates a vulnerable group fund that will be financed through a new telecommunications tax charged on phone calls at not less than one kobo per second of GSM calls.

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 to the authority.

With an average call rate of 11 Kobo per second, the new law implies at least nine per cent 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.

Telecoms operators had in April 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 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 said 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.