Operators yet to receive guidelines on direct telecoms VAT monitoring
NIGERIAN MOBILE NETWORK OPERATORS (MNOs) have said they are still waiting on Nigerian Communications Commission (NCC) and the Federal Inland Revenue Service (IFRS) to release guidelines on direct monitoring of telecoms value added tax (VAT).
The operators were responding to a check by our correspondent a week after the NCC and FIRS, Nigerian’s telecoms industry regulator and highest revenue generation agency of the federal government respectively, signed a Memorandum of Understanding (MoU) that will allow the latter monitor operators’ network for payable VAT.
With the MoU, there will be an integration of an application programming interface (API) technology solution with the telecom operators’ system for independent verification of the amount of VAT that should be paid by the MNOs.
Reacting to this, Gbenga Adebayo, president of Association of Licensed Operators of Nigeria (ALTON) said the modalities NCC will employ for the implementation is yet to be known.
According to him, “We have not received details on how the commission intends to implement it. Until we know the details of what NCC has signed with the FIRS and how they intend to implement it, we cannot say.
However, Adebayo pointed out other areas of concern that need to be addressed in the course of implementing the new VAT system.
“The issues we need to look at are questions around the impact on the current structure, the implications to the subscribers as well as the system and the integrity on the network.
“Going forward, another thing to consider is the core implication on the operators and the subscribers. Until we know NCC’s position on this, we can neither say nor do anything,” he stated.
In addition, Olusola Teniola, president, Association of Telecommunications Companies of Nigeria (ATCON), said that the activities of Over-the-Top (OTT) services have posed a major challenge to FIRS effective VAT verification in Nigeria’s telecommunications industry.
He explained that this appears to be the first step in attempting to verify VAT on voice and data services.
“The reality is that the ability for revenue assurance and account separation adoption in the telecoms sector to provide a verifiable means of establishing the taxes due to and received by government as when due is becoming more complex.
“As the integration of OTT services into consumers daily usage patterns increases across broadcasting, voice, data and multimedia channels, this effectively puts a challenge on FIRS to independently rely on real time data that may not be located or generated in country,” he explained.
Teniola, however, further stated that the move to a digital economy will place particular burden on FIRS to unravel the complex web underlying the digital economy.
At the signing of the MoU, Umar Danbatta, executive vice chairman of the NCC, had said that diligence and appropriate due processes were undertaken to conclude the agreement between the two government agencies, stressing that the commission took time to understand the importance of the MoU as a way to avoid double taxations.
“Our concern, as regulator of the telecoms industry, is that we needed to be sure that it is not another way to tax telecoms operators, who are already dealing with multiple taxation issues.
“We have also ensured that the integration of the solutions with telcos’ transactions systems will not, in any way, impact the cost and quality of service delivery by the operators to telecoms consumers,” Danbatta said.