Telecoms operators consider regional tariffs to counter state taxes

The Association of Licensed Telecoms Operators of Nigeria (ALTON) conveyed their concerns during the Nigeria eGovernment Summit 2023 held in Lagos. Gbenga Adebayo, Chairman of ALTON, expressed their unease about the persistent harassment by states and their agencies, which have been clamping down on telecom sites and imposing numerous taxes and levies on service providers.

Adebayo emphasized that the telecoms industry has been advocating against multiple taxation for years without significant change. He stated, “It may not be appropriate to continue to have one national tariff because the cost of providing services in one region is high. Services in different regions should reflect the cost of service provision.”

He further explained, “If you have a state that has imposed 50 different taxes on the operator, the telcos need to pass it on to the subscribers there. Otherwise, we would remain on this issue for many years to come.”

ALTON has engaged with the Nigerian Communications Commission (NCC) on this issue, seeing it as the only viable solution to mitigate the problem of multiple taxation and levies across state and local government levels.

Adebayo argued that the cost of services should align with the cost of doing business in a specific area. He cited the example that when a call originates from one state, it should attract a certain fee, which may be higher or lower than another state, depending on the local cost of service provision.

He highlighted, “Today’s reality needs a new approach. The time for national tariffs is gone.”

In recent times, Mobile Network Operators (MNOs) have been calling for tariff increases to offset the impact of economic challenges, multiple taxations, and high operating costs. In 2022, they sought a 40 percent tariff hike.

Prof. Umar Danbatta, Executive Vice Chairman of NCC, revealed that there are approximately 46 different taxes imposed on the telecoms sector, exacerbating the industry’s struggles.

The telecommunications sector has been a significant contributor to Nigeria’s GDP, responsible for 16 out of 20 percent, within the ICT industry’s overall 20 percent contribution. However, it’s under immense pressure from state governments and their agencies, which perceive it as a lucrative revenue source, leading to constant harassment of telecoms operators and base station shutdowns.

Multiple taxation, vandalism, and infrastructure challenges have plagued the sector, particularly due to Right of Way (RoW) levies. Some states have adhered to the agreed N145 per linear meter, while others have charged significantly higher fees or even zero RoW charges to facilitate infrastructure development.

As Kogi State threatens to shut down telecoms sites due to excessive taxes and Osun State embarks on a telecoms installations audit, it remains to be seen if regional tariffs will alleviate the telecoms sector’s tax-related woes in Nigeria. The industry is set to discuss these pressing concerns with the Minister of Communications, Innovation, and Digital Economy, Dr. Bosun Tijani, in the coming days.

Related posts

Rite Foods’ Premium Sosa Fruit Drink Receives Halal Certification for Quality Standard

Desmond Ekeh

Africa Missing In Top 100 Brandz Global List

Desmond Ekeh

Third Mainland Bridge to be Shut Down for Christmas

Quadri Semiu

Leave a Comment