Telcos eye Tinubu’s reforms to ease multiple taxation burden

Operators in the telecommunication sector are optimistic that the comprehensive tax reform package of President Bola Tinubu’s administration will ease the financial burden of multiple taxes that currently weigh down the industry.

The industry, a key pillar of the nation’s economy, paid an overwhelming N2.4tn in taxes in 2023, according to the Groupe Special Mobile Association report obtained by The PUNCH.

The report indicated the sector’s increasing tax burden, noting a 35.91 per cent year-on-year rise in taxes paid during the first quarter of 2023, totaling N119.87bn, up from N88.19bn in 2022.

The Chairman of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo expressed confidence that Tinubu’s tax reforms would address the industry’s tax challenges.

The tax reforms bill before the National Assembly has sparked significant debate in Africa’s most populous nation.

It proposed several key changes. These include a gradual increase in Value Added Tax (from 7.5 per cent to 15 per cent by 2030 and an adjustment in Company Income Tax, which would set a rate of 27.5 per cent for large companies, reducing to 25 per cent by 2026.

“We think that the outcome of the work of that committee will address the concerns on tax review,” Adebayo told The PUNCH.

“Our regulator has been significant in looking at the issue of multiple taxes. For now, we will wait and see what the outcome will look like and hopefully, some of our worries about multiple taxes will be addressed.”

Meanwhile, some stakeholders have expressed optimism that the proposed reforms could resolve the sector’s long-standing issues with multiple taxation.

The unification of tax collection, they say, could streamline revenue processes, reduce inconsistencies, and ease the financial strain on industries.

Telecom operators in Nigeria are currently subject to approximately 50 different taxes imposed by federal, state, and local governments.

These levies, combined with inconsistent right-of-way fees and arbitrary charges from various authorities, have hindered infrastructure development and stifled growth.

Adebayo has stressed that the issue of multiple taxation remains a critical concern, urging the government to deliver on its reform promises to create a more sustainable operating environment for the industry.

In a recent industry event, the President of the Association of Telecommunication Companies of Nigeria, Tony Emoekpere, called on operators to address the key barriers hindering the sector’s growth, including right-of-way bottlenecks and multiple taxation.

“Our goals are clear: we must advocate for policies that foster innovation and investment, drive infrastructure development to bridge connectivity gaps and collaborate across public and private sectors to position Nigeria as a leading digital economy in Africa,” Emoekpere said.