Report: Multiple Taxation Stifling Growth of Telecom Sector

Growth of Nigeria’s telecommunications industry is crippled by challenges of multiple taxation; a report has stated.

The report disclosed that telecommunications firms in Nigeria pay over 40 different taxes and levies, imposed by various different state and local governments.

The report was launched at a programme organised by Africapractice, a Strategic Communications firm. The report was on Tax and Enabling Business Environment in Telecoms.

According to the report, “Nigeria’s telecommunications industry is crippled by a multiple taxation challenges.

Telecommunications firms in Nigeria pay over 40 different taxes and levies, imposed by various different state and local governments.

“This directly impacts the industry’s ability to innovate; to improve mobile and data network quality, to reduce prices, to drive mobile penetration, and to deploy infrastructure around the remotest parts of the country. This also directly impacts the ability of telecoms operators to support nascent businesses and industries, further stunting economic growth. And when the number of taxes imposed continue to rise even further, as with the recent introduction of the Police Trust Fund Levy, Communications Service Tax, these costs are inevitably passed on to you the consumer.”

The report further said telecommunications operators expend vast amounts of money to construct masts, towers and provide the infrastructure that allows subscribers to connect with your families, friends, colleagues, businesses, emergency response services and even the rest of the world. With penetration levels around 70-80 per cent there is a demand-supply gap that our telecommunications operators must meet.

The report added that the over-taxation of the telecommunications industry is not unique to Nigeria.

“For various reasons, the industry is one of the few, with the unique combination of a degree of relative demand inelasticity, an expanding consumer base peculiar to developing countries and inelastic short-run supply.

“Evidence, however shows that removing or reducing the taxes on mobile connections or handsets has had net positive impacts on the economy and can increase digital inclusion, spurring inclusive growth. “The available evidence indicates that the reduction or removal of telecommunications sectorspecific taxes across countries by 2020 could have a sizeable