Multiple Taxes: Telcos Threaten To Shut Down Networks

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Nigerian telecom operators have said that the over N10 billion annual multiple taxations levied them by local, state and federal governments and their agencies was threatening the survival of the telecom sector as investors may be pushed to divest from the sector which may in turn aggravate the quality on networks.
About eight states and their local governments have issued notices to telecom operators to pay taxes and levies exceeding N10 billion annually.
Speaking under the aegis of the Industry Working Group (IWG) on multiple taxations in the telecom industry, the operators and the Nigerian Communications Commission (NCC) yesterday in Lagos said the survival of the industry now depends on all stakeholders, prevailing on the states and local governments to stop insisting on collecting taxes and levies on operators’ infrastructures such as base stations and masts.
The chairman of the IWG and Executive Commissioner, Stakeholders Management at NCC, Mr. Okey Itanyi, said that multiple taxation portends a grave danger for the telecoms industry if not quickly addressed. “The country may lose the gains and confidence achieved so far in the last couple of years.
The industry still requires investments in network infrastructure to ensure full access across the country, and to guarantee good and acceptable quality of service which has become a major challenge,” he said.
According to the vice chairman of the IWG, Mrs. Oyeronke Oyetunde, multiple taxation has been impeding telecoms growth in recent past.
She explained that a situation where a local government authority is demanding about N10million on each site from telecoms operators for building base stations in their vicinity, apart from other levies the operators have to contend with at the state and federal levels, would hinder operators in providing quality telecoms services to the generality of Nigerians, irrespective of their locations.
She noted that as a result of delay often experienced in infrastructure rollout, telecoms companies have only been able to deploy barely 20,000 base stations in the country, stressing that over 70, 000 base stations would be required in Nigeria, given its large size, to provide ubiquitous telecoms services.
“If you have a local government demanding N10m from an operator and you now multiply that by the number of Local Government Areas we have in the country, you would see that this is unsustainable in the long run for the operators.
It is either you kick the operators out of business or force them to pass the cost accrued to them through such illegal taxations their customers in form high tariff,” she said.
The President, National Association of Telecoms Subscribers, Chief Deolu Ogunbajo, noted that between 2006 and 2007, operators were charged about N10, 000 and N20, 000. “And more recently, the charges in form of multiple taxations and illegal demand of some frivolous levies, have run into millions of naira. This is unfavourable as operators may have to pass this cost to subscribers,” he said.
A representative of the Association of Licenced Telecommunication Operators of Nigeria (ALTON) and member of the IWG, Mr. Tobe Okigbo, said, “The operators may not have other choices than to push additional cost incurred to their subscribers rather than allow a telecom firm to totally shut down.”
Okigbo gave the indication during the maiden media parley of the IWG on multiple taxation which was set up by the NCC to address ongoing cases of multiple taxation and its potential dangers on telecom growth in the country.
The group called for urgent action by the government at all levels to support the industry’s stakeholders in nipping the incessant cases of multiple taxation and illegal and frivolous taxes in the bud to prevent operators passing the cost of the taxes on the over 96 million telecom subscribers on their various networks in form of increased tariff.
Via All Africa

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