Telcos Express Worries over Imminent Increase in Taxes, Levies

Telecommunication operators (Telcos) under the aegis of the Association of Licensed Telecoms Operators of Nigeria (ALTON) have expressed concern about the amended Taxes and Levies Act 2015, recently approved by the federal government for collection among states and local governments.

The amended Act, which was signed by the former Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, and gazetted as official document under the Federal Republic of Nigeria, on May 26, 2015 and obtained by the Lagos State Government on June 7, 2015, clearly stated the amended law on harmonisation of taxes and levies in states and local government, without fixing any particular rate. ALTON has expressed fears that since the taxable rate was not fixed, it would give room for states and local government authorities, to arbitrary increase levies and taxes.

ALTON had been at loggerheads with all state governments, over what it described as indiscriminate imposition of taxes and levies across states, which it said, was affecting the growth of telecoms industry in the country.

Analysing the amended instrument, the Executive Secretary of ALTON, Mr. Gbolahan Awonuga, raised the concern that the potentially troublesome aspect of the instrument is that, apart from recognising and approving, it does not fix the taxable rates, hence the relevant tier of government is at liberty to arbitrary fix or increase the rates if it chooses.

“The most disturbing aspect of the entire instrument is that instead of addressing the issue of multiple taxes, it effectively increased the tax burdens of individuals and businesses in Nigeria. Interestingly, the minister who signed the instrument is no longer in power to entertain stakeholders’ concerns.”

He explained that the danger of multiple taxation regime runs contrary to the desirable robust economy and investment friendly regime that the government of the day is preaching.

“Hence, stakeholders’ concerns must be voiced and drummed at every given opportunity; in symposia, through the media, through the Chambers of Commerce, keynote addresses, and even press statements. The Presidency must be made aware of the misnomer of enacting an anti-people instrument. We will need to partner with relevant stakeholders and right group to ensure a tidy tax regime is

evolved for the benefit of all and sundry,” Awonuga said.

According to him, “it is worrisome that item 3 (b) of the amended Schedule to the Taxes and Levies (Approved List for Collection) Act brought in new levies and taxes under items 12 – 25. Most of these taxes and levies were hitherto charged by the states and we have contested them on the grounds that they are not applicable to our operations. We had prior to now, relied on the previous taxes and levies before the amendment amongst other legislations,” he said.

With the amendment, it gives the states a leeway to clamp down on telecoms operators with sundry levies, charges and taxes, Awonuga added.

He suggested that instrument should fix fees, rather than allowing states and local governments to fix arbitrary fees. He called on the Nigerian Communications Commission (NCC) to engage the relevant authorities on taxes that are applicable to telecom operators in order to curb the number of demands operators receive from States/LGAs.