By Olabisi Olaleye bisiolaleye@gmail.com 08094000013, 08111813040
Nigeria’s telecommunications industry is the fastest growing as described by the International Telecommunications Union (ITU) and based on evidence from taxes and licensing fees, which generate over N640 billion annually to the coffers of the federal government.
It has become an established fact that several tax payments and levies paid by telecommunications companies and monies generated by the telecomsregulator, the Nigerian Communications Commission (NCC), through licensing and spectrum sale, net over N640 billion annually.
Similarly, a report by Pyramid Research has showed that licensed telecommunications companies in Nigeria remit more than N220 billion to government in taxes and other regulatory fees annually.
This is in addition to the over $68 billion, which the sector has also attracted in local and foreign direct investment (FDI) in the last 16 years of deregulating the sector.
Investment in the industry stood at about $500,000 in 2001.
Also, from mobile subscriptions and teledensity of less than 500,000 and less than 1 per cent in 2001, mobile subscriptions have now increased to reach 154.5 million while teledensity stands at 110 per cent.
This is coming even as telecoms companies in Nigeria call on the federal government to help address the issues of multiple taxation and indiscriminate closure of facilities by agents of government over operators’ reluctance in paying frivolous and illegal levies.
As an industry source said recently, telecoms contribution to the economy over the years has been phenomenal in Nigeria as it generates N640 billion in licence and spectrum fees alone annually.
However, stakeholders in the industry believe that the despite the contrributions to the gross domestic product (GDP) of the economy, multiple taxation of infrastructure may impede development and stunt growth in the sector.
For instance, multiple taxes on the same income base, transaction or person by one or more levels of government in one or more jurisdictions, has been on the rise in the industry.
Observers agree that the causes of multiple taxations are the declining income from the federation account owing to the fall in oil prices, federal structure and the constitution authorising certain items to be legislated across the three tiers of government; aggressive drive to increase internally-generated revenue, particularly at the state and local government levels; and the belief that telecoms is a “cash cow” that should be the main target in raising revenue for state.
Company secretary, Airtel Nigeria, Mr. Shola Adeyemi, said, “Taxation of infrastructure will constrain infrastructure deployment, whereas subsidising deployment of same will facilitate broader tax revenues from the ensuing value chain of economic activity.”
On his part, president of the Association of Telecommunications Companies of Nigeria (ATCON), Mr. Olusola Teniola, described all the challenges confronting them as ‘evil’ to the growth of the industry.
He maintained that operators should be given more opportunities to roll out infrastructure faster, in order to provide pervasive services to Nigerians, stressing that other countries have more than enough base transceiver stations and more conductive environment to deploy services, but the same cannot be said of Nigeria.
“It is only through more towers housing more base stations that (companies) will cover the many black spots present in the network coverage across the diverse terrain that makes up Nigeria that we can reasonably expect to fully resolve ‘drop calls,’ for example, and other environmental issues that are inhibitors to the improvement of quality of service (QoS).
“As I have reiterated, as an industry, we are in shortage of about 60,000 base stations to be able to provide effective services to Nigeria and government has to provide the enabling environment to let us begin to work in bridging this infrastructure gap as from this year 2017.
“We also need the infrastructure to be protected from closure, destruction and sabotage.”
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