MTN, Airtel, Glo, Others Pay Over 49 Taxes, Levies as Telcos Demand Tariff Increase
- Telecom companies in Nigeria have lamented the huge number of taxes and levies they pay
- ALTON disclosed this as they insist the numerous payments hinder their quality of service
- They call on regulators and the FG to consider a drastic reduction in the levies in the sector
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the stock market.
Telecommunication companies in Nigeria are burdened with the responsibility of remitting a substantial number of taxes and levies to governmental bodies across the three tiers and various non-state entities.
This was outlined in a recent report compiled by the Association of Licensed Telecom Operators of Nigeria (ALTON).
The report suggests that operators are compelled to make these payments, or their base transceiver stations (BTS) may face the threat of closure, potentially jeopardizing the quality of service (quality of service) they provide.
Source: UGC
It would be recalled that a few weeks ago, ALTON, on behalf of telecom operators, suggested that subscribers may encounter varying charges for calls, data, SMS, and other services in distinct states.
The telecommunications providers disclosed that this action aims to address the issue of excessive taxation in diverse business environments across various states.
ALTON highlights multiple taxes, challenges in the sector
Telecom operators are confronted with the Right of Way (RoW) charges and additional financial adjustments outlined in the Finance Act 2023.
According to The Nation, these changes involve raising the Tertiary Education Trust Fund Tax from 2.5% to 3%, introducing Value Added Tax (VAT) on cell towers or BTS,
Others include the imposition of import levies on goods and eliminating capital allowances for telecommunications equipment and services, as detailed in Section 32 of the revised Companies Income Tax Act, among other modifications.
These challenges are further exacerbated by the surge in legislative bills to introduce fresh taxes and levies on private enterprises, including telecom operators, within the National and state Houses of Assemblies.
The escalation in the cost of automotive gas oil (AGO) has severe repercussions for telecommunications operations, notably within the colocation sector.
ALTON report stated:
The 300 per cent increase in diesel cost which was implemented at the beginning of the year, humongous indebtedness in the industry, lack of access to and increased rate of foreign exchange to service their operations, dire levels of insecurity across the country with increased theft and damage to our members sites, have all prevented our members from running their business efficiently and profitably.
The document reaffirmed the telcos' dedication to enhancing Quality of Service (QoS) and the overall quality of experience for all subscribers.
They emphasized their ongoing investments in expanding network coverage and capacity to enhance the overall quality of service, all for the benefit of their valued customers
Apart from the issues mentioned above, the telcos are battling to retrieve from banks an outstanding N120 million debt owed from Unstructured Supplementary Service Data (USSD).
Confirming ALTON's report, a senior staff of one of the major telcos, who chose to speak to Legit.ng anonymously said the taxes are taking up a significant fraction of their earnings.
He said:
The amount of money spent on paying these taxes to different tiers of government makes up a significant part of our earnings. When we started in the early 2000s, we were paying less than half the number of taxes we are paying today. It seems like the taxes keep increasing in number as time goes on.
He added that the attention of the agencies, authorities and government have been brought to the matter, but nothing tangible has been done to resolve the issue.
NCC reels out new guidelines for MTN, Airtel, Glo, others
Meanwhile, Legit.ng earlier reported that the Nigerian Communications Commission (NCC) introduced fresh directives for telecom companies to enhance customer experiences and relationships.
These new guidelines are designed to adhere to Section 57 of the NCC Act, which permits stakeholders to provide input on policy matters.
According to the NCC's official documentation, the regulator has requested telecom firms to ensure that customers are attended to within 30 minutes of their arrival at any of the company's service centres throughout Nigeria.
Source: Legit.ng
