BREAKING NEWS, Business
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Umar Garba Danbatta, executive vice chairman of the Nigerian Communications Commission promises to end the era of multiple taxations on telecommunications operators in Nigeria
| By Anayo Ezugwu | Dec 14, 2015 @ 01:00 GMT |
TELECOM operators in Nigeria may soon heave a sigh of relief from being subjected to multiple taxations by different arms of government and agencies in country. The Nigerian Communications Commission, NCC, has promised the operators that the era of multiple taxations would soon be over. The promise is coming on the heels of continuous agitation for the harmonisation of taxes and multiple regulations levelled against telecom operators in Nigeria by state governments and government agencies. Umar Garba Danbatta, executive vice chairman, NCC, who made the promise, said that the state governors have promised to work on the taxes and regulations.
His assurance was hinged on the successes recorded from the Nigerian Governors’ Forum, NGF, where the issue of multiple regulations and taxes on telecommunication operations in the country were discussed extensively. Besides talks with NGF, Danbatta said the NCC had also engaged other agencies of government on the same issues with a view to improving relationship with telecom companies, who are often the victims of these taxes and multiple regulations.
Danbatta gave the assurance when he received the management team of ATC Wireless Infrastructure Company of Nigeria, ATC Nigeria, which specialises in infrastructure management. “The NCC as a responsible regulatory agency was worried about multiple regulations and taxes because they do not augur well for smooth development of the telecommunications sector. So we have decided to engage all stakeholders especially other government agencies in order to cushion the pains operators go through, as a result of multiple regulations and taxes.
“The NCC is particularly worried about the indiscriminate way base transceiver stations (base stations) are sealed by agencies and some state governments and we have appealed to these agencies and the state governors to show some understanding. We are particularly in talks with them to understand the implications of these actions as they affect quality of service and other sundry matters, including power supply,” he said.
Danbatta implored the ATC Nigeria to ensure regular power supply to its managed base stations in order to make a difference, since government has created an enabling environment for businesses to thrive.
Responding, Gordon Porter, chief executive, ATC Nigeria, said his team came to familiarise itself with the NCC management and to “tell you what we do, how we do it and why we do what we do.” ATC recently acquired 4716 cell sites from Bharti Airtel Nigeria and for the past 146 days it has deployed 1,000 generators and replaced 600 air-condition units.
So far, more than $11 million has been invested by the company in the towers with a view to improving quality of service significantly. ATC has been in constant talks with host communities with a view to improving relations and right-of-way.
According to Porter, although it has a commercial relationship with Airtel, it is interested in working with other operators especially on the issue of co-location, adding that ATC hopes to inject about $100 million in the business in the next two years.
The telecom operators are facing different kinds of taxations and regulation from the state governments across the country. Most state governments have come up with state policies on how to regulate telecom in their various states, insisting that the activities of telecoms must be regulated by states, irrespective of the statutory regulation by the NCC. They have argued that since the state governments provide infrastructure like roads, electricity and security in the states where the telecoms service providers operate, they therefore have the right to regulate the operators in their respective states.
Some states go as far as imposing outrageous levies on telecoms operators and would not allow them to rollout telecoms infrastructure in their states without the operators paying for such levies, which covers base station installation, laying of fibre cables, among others.
The telecom operators had in October this year called on the state governments across the Nigeria to harmonise the multiple taxes charged them so as not to impede expansion of investments in the sector. The operators complained that the huge financial burden imposed on them as taxes by state governments are a major hindrance to further investment in network expansion and improving the quality of service in the country.
According to the telecom operators, if the taxes charged them were not harmonised and arbitrary Right-of-Way charges abolished, they might hold back in terms of making the necessary investments in network expansion.
Realnews reported that multiple taxations were hindering the operators from spending an estimated $6.2 billion on network expansion, which was initiated in 2014, to improve the quality of service mandates given to them by the NCC. It quoted telecom operators as saying that part of the N979 billion investments not already spent would be held back until state governments across the country address the imposition of unstructured fees and charges by the various tiers of government and service interruptions arising from collection attempts. The operators are taking this step because they cannot keep investing when multiple taxation as well as other challenges continue to have a negative impact on their operations and continue to erode their revenue base.
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