The fight against multiple taxations in the Nigerian telecommunications industry has received a boost from the Nigerian Communications Commission (NCC) after the regulator condemned the tax system by State Governments.
The NCC said the multiple taxations has a negative ripple effect as it spreads from the network operators to the economy. This was made known by NCC’s executive commissioner for Stakeholders Management, Sunday Dare.
During the North-East Stakeholders’ Parliament meeting with relevant agencies in charge of telecommunications matters on Thursday in Yola, State Governments were cautioned against clamping down on telecoms firms for state taxes which are said to have adverse effects.
However, MTN Nigeria insisted the Kogi State government didn’t have the jurisdiction to regulate telecommunications companies in Nigeria. The company argued that only the Federal Government and its agencies had the sole authority.
Meanwhile, the shutdown resulted in MTN Nigeria instituting legal action against the Kogi State Government. The telecom company demanded N5 million in damages and a declaration that nullifies the shutdown and declare that the parties involved did not have the power to perform such acts in the first place.
While warning State Governments against multiple taxation, Dare said its repercussion could affect the growth of the telecommunication sector. He further stated that multiple taxations discourage investment in the long-term even if it generates substantial short-term revenue for the authorities.
“The current practice of imposing heavy sector-specific taxes and charges on telecoms infrastructure; levying huge Right-of-Way charges and decreeing onerous regulations may appear to bring immediate revenues to the coffers of the state. But let us be clear: multiple taxation and regulation of the telecoms industry discourage investment.
“They deny government of long term revenues and they destroy the foundation for future growth.
“This is why we must all work towards win-win solutions that enable operators to roll-out fast and efficient networks which create opportunities for our citizens and develop our economies.”
He advised that instead of hitting telecoms firms with multiple taxation that could affect expansion of infrastructures, the State governments should provide every resources network operators need in order to contribute to the country’s economic growth because the penetration of broadband and ICT infrastructure by 10 per cent would boost national GDP by 2.5 per cent in one year.