NCC

NigeriaN Telecommunication operators has rejected the plans by the federal government to introduce communications tax saying it would impact negatively on economic and broadband development. This was disclosed in a  statement signed by the ALTON executive secretary, Gbolahan Awonuga, it stated that ‘the introduction and collection of the Tax without the exclusion of the applicability of the Value Added Tax (“VAT”) which was introduced by the Value Added Tax Act and is also applicable to services rendered by service providers in the telecommunication sector, will amount to double taxation as the proposed tax is an additional tax on communication services rendered to the same end users who already pay a five percent (5%) tax as VAT.’ The association said that the administration of this tax regime as proposed will be cumbersome and impractical. “We must correct this general notion that service providers can absolve any tax without considering the capital and operational cost to the service providers.” The statement noted that high consumer taxes on communication services would impact negatively on economic and broadband development. “Today the country has more than 83 million unique subscribers, accounting for 45 per cent of the population. As well as providing access to financial services, Education and Healthcare to millions of citizens, many for the first time, telecoms has also played a critical role in reducing transportation, communication and transaction costs. Pushing up the cost to consumers, this tax will inevitably adversely impact the adoption of broadband affordability which is a key challenge in connecting the unconnected. “In addition, the telecom ecosystem contributed US$8.3 billion in value add to the Nigerian economy in 2014 alone, and telecom operators supported the creation of 164,000 telecom growth is a fundamental part of the government’s Vision 2020 plan to consolidate Nigeria’s position as one of the 20 largest economies jobs . Such is its significance, that driving in the world and a central element of President Buhari’s election manifesto.” It added that, the communication service tax on the contrary, will negatively impacting take- up of consumer services and decline industry revenues. “The proposed tax will reduce the incentive for telecom operators to invest in the infrastructure improvements that are essential to improve and expand mobile/broadband connectivity across Nigeria. Telecom industry investment in Nigeria is already constrained by multiple taxation and may not have room to contain the tax. There are 26 different taxes and fees levied on mobile operators and consumers, including national and local taxes on revenues, businesses and business sites as well as regulatory fees such as spectrum and permits fees. On the National Broadband Plan, ALTON said that broadband penetration remains low at less than 10%, with the government setting a target of 30% by 2018. NigeriaN Telecommunication operators has rejected the plans by the federal government to introduce communications tax saying it would impact negatively on economic and broadband development. This was disclosed in a  statement signed by the ALTON executive secretary, Gbolahan Awonuga, it stated that ‘the introduction and collection of the Tax without the exclusion of the applicability of the Value Added Tax (“VAT”) which was introduced by the Value Added Tax Act and is also applicable to services rendered by service providers in the telecommunication sector, will amount to double taxation as the proposed tax is an additional tax on communication services rendered to the same end users who already pay a five percent (5%) tax as VAT.’ The association said that the administration of this tax regime as proposed will be cumbersome and impractical. “We must correct this general notion that service providers can absolve any tax without considering the capital and operational cost to the service providers.” The statement noted that high consumer taxes on communication services would impact negatively on economic and broadband development. “Today the country has more than 83 million unique subscribers, accounting for 45 per cent of the population. As well as providing access to financial services, Education and Healthcare to millions of citizens, many for the first time, telecoms has also played a critical role in reducing transportation, communication and transaction costs. Pushing up the cost to consumers, this tax will inevitably adversely impact the adoption of broadband affordability which is a key challenge in connecting the unconnected. “In addition, the telecom ecosystem contributed US$8.3 billion in value add to the Nigerian economy in 2014 alone, and telecom operators supported the creation of 164,000 telecom growth is a fundamental part of the government’s Vision 2020 plan to consolidate Nigeria’s position as one of the 20 largest economies jobs . Such is its significance, that driving in the world and a central element of President Buhari’s election manifesto.” It added that, the communication service tax on the contrary, will negatively impacting take- up of consumer services and decline industry revenues. “The proposed tax will reduce the incentive for telecom operators to invest in the infrastructure improvements that are essential to improve and expand mobile/broadband connectivity across Nigeria. Telecom industry investment in Nigeria is already constrained by multiple taxation and may not have room to contain the tax. There are 26 different taxes and fees levied on mobile operators and consumers, including national and local taxes on revenues, businesses and business sites as well as regulatory fees such as spectrum and permits fees. On the National Broadband Plan, ALTON said that broadband penetration remains low at less than 10%, with the government setting a target of 30% by 2018.


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