Danbatta urges govts to reduce tax burden on telecom operators, consumers

Worried by the issue of multiple taxation affection the telecom operators in Nigeria, the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta has urged the federal and state governments to reduce the taxes in order not to stifle innovation or place undue burden on consumers.

Danbatta made the appeal at the “NCC Special Day”, at the ongoing Abuja International Trade Fair, organised by the Abuja Chamber of Commerce and Industry (ACCI).

He stated that the commission acknowledged the intricacies of tax policies while emphasising the importance of creating an environment where telecommunications companies can thrive.

To address the challenges, Danbatta said the Commission will continuously engage both the Federal and State Governments on the need to harmonize taxation in the telecommunications sector.

He said: “This year’s edition of the Trade Fair with the theme – ‘Sustainable Financing and Taxation’ is very apt and timely, especially considering the pivotal role the telecommunications industry plays in driving economic growth, fostering innovation, and enhancing the quality of life for citizens across the globe. As the telecommunications regulator in Nigeria, we bear the responsibility of ensuring the sustainability and vitality of the sector.

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“The Commission recognises the fact that the telecommunications sector has been a strategic driver of the digital economy agenda of the Federal Government, as it continues to provide the needed digital stamina to support the economy, especially through technology. It is no longer news that telecommunications empowers individuals, connects businesses, strengthens industries, and enables Governments to provide essential services efficiently thereby driving development and prosperity.

“Information Communications Technology (ICT) is not only one of the fastest growing industries – directly creating millions of jobs – but it is also an important enabler of innovation and development, as it provides the backbone infrastructure for transactional business and taxation for Government. However, maintaining this digital infrastructure and its continued growth necessitates substantial investment.

“Sustainable financing in telecommunication involves sourcing the necessary capital to build and maintain robust telecommunications networks. As regulators, we understand that this financing should be stable, accessible, and conducive to industry growth. Taxation while essential for funding Government initiatives must strike a delicate balance between revenue generation and industry growth.

“Our role as regulator is to advocate for fair taxation practices that do not stifle innovation or place undue burden on consumers. We acknowledge the intricacies of tax policies but emphasize the importance of creating an environment where telecommunications companies can thrive. To address these challenges the Commission continuously engage both the Federal and State Government on the need to harmonize taxation in the telecommunications sector.

“NCC’s regulatory efforts in deepening access to digital services will benefit Nigeria and make it competitive comparable with other economies in the areas of job creation; contribution to Gross Domestic Product (GDP) growth; emergence of new services and industries; workforce transformation; and business innovation.

“It is in our response to ensuring that Nigeria is competitive in all these areas that the Commission continuously puts a number of regulatory measures in place to ensure seamless access by Nigerians to telecommunications services in order to deepen competitiveness of the Nigerian economy by making our businesses and industries digitally compliant.

“In Nigeria today, the number of active mobile subscriptions reached 220,715,961 million as of August 2023, while Teledensity stood at 115.63 percent at the same period. Also, the number of active Internet subscribers was 159,034,717 Million with broadband penetration at 45.57 percent as of August 2023. In this new environment, the competitiveness of Nigerian businesses depends on their ability to leverage new technologies by acquiring the necessary digital skills to do business on an international scale. This in turn benefits the economy financially.”