The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has said that the suspension of the 5% excise duty on telecom services has taken away the burden of collections off the telecom operators and the weight of the subscribers, but there are more tax issues that need to be addressed by the government.
Chairman of the Association, Engr. Gbenga Adebayo, who stated this in a phone call interview with Nairametrics, noted that the issue of multiple taxation in the telecom industry has been a major challenge.
According to him, the telecom operators in Nigeria are currently paying a total of 39 taxes and levies, which need to be addressed by the Tinubu administration.
While noting that the government has acted responsibly by suspending the 5% excise duty, Adebayo said that the tax would have compounded the current woes of many Nigerians who are already battling with the increase in the price of several other products and services.
Relief for telcos, subscribers
The ALTON Chairman, while explaining how the tax would have impacted the telecom industry, said:
- “I must also remind you that the burden of that 5% excise duty would have been on the telecom operators while the weight would have been on the subscribers because that would mean that the subscribers would have to pay more while we would have to go through the burden of collection and remitting to the government.
- “We think that the government has done well in this regard by taking the burden away. We must also note that the previous administration had granted an exemption of the telecom services from the 5% excise duty. In our understanding, we had advanced the right argument why it shouldn’t happen, but we later heard from the new administration that they were going to withdraw that exemption.
- But the pronouncement they have made today and the executive order signed by the President suggest consistency in government policy, which is commendable. We are pleased about it and we are thankful for the policy consistency.”
The multiple taxation challenge
Adebayo said the next thing for the government is to find a way to reduce the number of taxes being imposed on telecom operators by different levels of government across the country.
- “What we will task them on next is to confront the issue of multiple taxation in the telecom industry. We currently as an industry are paying as many as 39 different taxes and levies across the country. There is no industry that can sustain that level of demand from governments at different levels. It is not sustainable and it is also not good for our regulation and for our policy environment.
- “When people look at the state of health of the industry, and the behaviour of public actors, these are the indices they check. The multiple taxes make our environment unpredictable. You can’t do planning or projections because you don’t just know what will happen tomorrow. So, we think that the government of the day has a duty to confront this issue of multiple taxation and levies in the telecom industry,” he said.
Adebayo added that the telecom industry should not be treated as an extractive industry as it is neither an oil and gas nor a mineral exploring industry, but an industry providing social services that have impacts on the economy and lives of the people. He said the government has to address tax issues for the state of health of our industry and for the overall benefit of the subscribers.
