- May 31, 2019
- Posted by: Myles Freedman
- Category: More Africa News, Policy & Regulation
The current heavy taxes imposed on telecoms companies at the federal, state and local government levels, have been a major obstacle, which retards economic growth, limits profits, compromises quality of service and slows network expansion.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.
Also the police and thugs, who supported the drive of the multiple tax imposers make it difficult to resist them.Industry stakeholders recently picked holes in the nation’s tax structure, saying the ugly menace of multiple taxation has to be removed to attract more investors into the nation’s telecoms industry.
They called for an Executive Order (EO) to stem incessant multiple taxes imposed on their operations.They unanimously agreed that the ongoing negotiations between telecoms operators, telecoms regulator and state governors were not yielding results as the state governors were bent at milking telecoms operators, through multiple taxation.
Dr. Omobola Johnson, former minister of Communications Technology, said four years before she was appointed the minister, the issue of multiple taxes had been on ground, stifling telecoms growth and expansion.
According to her, four years after she left as minister in 2015, the issue of multiple taxes still lingers.She therefore advised the NCC to consider alternative resolution in the area of Executive Order to address the issue. Gbenga Adebayo, chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), said it had led to closure of telecoms sites severally by state governments and federal government agencies, an action, he said, had always affected the quality of service rendered by telecoms operators.
Citing the recent closure of several telecoms sites in Kogi State, on the orders of the state government as a result of the refusal of telecoms operators to pay huge sums of money to the state government as telecoms taxes, Adebayo said some of the taxes were irrelevant to the operators, like ecological tax, generator emission tax, waste management tax, among others.
On her part, Ms. Funke Opeke, chief executive officer, MainOne, said multiple taxes have slowed down telecoms growth in the last ten years.She commended the United State government for protecting indigenous companies by giving them incentives like tax waivers, and therefore called on the Nigerian government to device means of encouraging indigenous companies, rather than stifling them through multiple taxes.
But Law Kalu, a lawyer, said that the industry must also highlight the consequences of multiple taxation which includes the relocation of businesses outside Nigeria evident in the manufacturing sector of the Nigerian economy, downsizing and retrenchment of staff, unemployment and loss of revenue to government.