Heavy taxes push back investments, stagger telcos

Nigerian Telecommunications industry was once referred to as one of the fastest growing in the world.

The situation is, however, a lot different today as many operators are faced with a lot of challenges.

The major challenge is the monster called-multiple taxation; and they are coming from all manners of government agencies at every well.

In addition to the statutory taxes levied on operators; telecommunications operators pay Annual Operating Levy (AOL) of certain percentage of earnings to the Nigerian Communications Commission (NCC) and are required in addition to pay various rates and charges to other Federal Government agencies (e.g. Consumer Protection Council, Nigeria Lottery Commission, federal and state ministries of environment etc), authorities in every state and local Government in which they operate.

It has also become a common practice for any government agency be it federal or state to solicits for one levy or the other from operators before they can build infrastructure or operate.

Some of the imposed taxes include; aviation clearance, site Inspection Fee, hawking permit, building permit, building fitness, sewage fees, fumigation, sewage fees, refuse collection and disposal, capitation fee, shop rate, among others.

Also the police and thugs, who supported the drive of the multiple tax imposers make it difficult to resist the collection of these illegal levies and taxes.

Association of Licenced Telecommunication Operators of Nigeria (ALTON) recently cried out and asked the Federal Government to review the Amended Tax Order of 2015 to reduce multiple taxation.

Mr. Gbenga Adebayo, chairman of ALTON, said since the order was signed in 2015, it has created a lot of confusion in the taxes and levies regime and made the telecoms environment hash for business, not minding the federal government executive order on ‘Ease of Doing Business in Nigeria.’

Nodding in agreement, Olusola Teniola, president of the Association of Telecom Companies of Nigeria (ATCON), stated that the industry needs the government to create the enabling environment, as well as create a more stable foreign exchange regime because, the multitude of forex windows we currently have, is not encouraging the investor.

To drive home his point, Adebayo, appealed to President Mohammadu Buhari to declare telecommunications infrastructure as critical national infrastructure to address the problem of close of cell sites in the country.

Advertisement

“We have Cybercrime act which is already an act of parliament, a provision of that act demands the president to pronounce certain infrastructure as critical national. We are saying on the strength of that law, the president should give an order declaring telecommunications infrastructure as critical national infrastructure. With that order tomorrow, the game will change,” he said.