Multiple taxes detrimental to Nigeria’s telecom industry – NCC

The Nigerian Communications Commission (NCC) has identified multiple taxation as a major challenge that is hindering the sustainable growth and development of the telecom industry in the country.

The commission made the observation when its Executive Commissioner for Stakeholder Management, Adewolu Adeleke, addressed the issue of multiple taxation and regulations at the Regional Stakeholders Workshop in Kano on Wednesday.

The conference had the theme “Navigating the Landscape of Multiple Taxation and Regulations, Fostering Sustainable Growth through Collaboration.”

Adeleke, represented by Efosa Idehen, the Director of Compliance, Monitoring, and Enforcement at the commission, emphasized that the growth of telecom infrastructure, essential for the entire digital economy, is hindered by multiple taxation and regulations.

“This is not referring to legitimate taxes imposed by appropriate authorities following necessary due processes, but the many irregular, often duplicated and sometimes hastily posed taxes and charges which some agencies pursue for short-term revenue gains neglecting the greater long-term impacts of their actions on investor confidence, the socio-economic wellbeing of our people and overall national economic growth,” he said.

Adeleke remarked that certain state and local government agencies were enforcing taxes and regulations without proper legal authorization. This unwarranted imposition adversely impacted the telecommunications industry, leading to a ripple effect on its overall output.

According to him, the absence of appropriate legal backing for these taxes and regulations raised concerns about their legitimacy and highlighted the need for a more structured and legally sound approach to governing such matters at the regional and local levels.

“Multiple taxation and regulations imposed on infrastructure maintenance, environmental impact charges, waste collection charges, in addition to value-added tax and sales tax being paid simultaneously, add to the cost of services enjoyed by the consumers,” he added.

Speaking further, the Commissioner of the NCC strongly advocated for proactive measures to address the persistent challenge of multiple taxation and regulations.

Expressing the need for immediate action, the commissioner emphasized the importance of finding lasting solutions to this issue, recognizing it as a significant obstacle to the smooth operation of the telecommunications industry.

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He said that these proactive measures would not only alleviate the burden of multiple taxes and regulations but also pave the way for a more stable and conducive environment for the telecom sector.

“I am, therefore, pleased to note that one of the most pivotal actions taken by President Bola Tinubu upon assuming office was the establishment of the Presidential Tax Reform Committee. 

“We have presented our recommendations to the committee, and we are confident that it will make necessary recommendations to conclusively address the various dimensions of the problem of multiple taxations and regulations.

“In our view, prioritizing comprehensive tax reform will unlock the full potential of the Nigerian economy. These reforms should aim to simplify the tax system, eliminate redundancies, and promote transparency.

“Government at all levels must collaborate to create a harmonised tax structure that fosters economic growth rather than stifling it,” he said.

Furthermore, the NCC Commissioner stressed the need for speedy deployment of new infrastructure and the seamless operations of existing ones to achieve 90 percent broadband penetration by 2027 in the country.

“To illustrate, the industry experienced over 35,000 fiber cuts in 2022 and over 24,000 fiber cuts so far in 2023. Similarly, over N14 billion has been spent on repairing damaged fiber. 

“In the same vein, there have been over 18,000 denial of access cases recorded in 2022 and over 6,000 cases so far in 2023. Statistics of this nature cannot encourage anyone to invest. So we all owe it a duty to tackle this menace once and for all,” he added.

Adeleke noted that over 18,000 cases of denial of access were recorded in 2022 and over 6,000 cases so far in 2023, adding that action must be taken to tackle this issue as it discourages investors.