Nigeria’s operators may abandon nationwide tariffs over tax concerns

Nigeria’s operators may abandon nationwide tariffs over tax concerns

In an interesting recent development, Nigeria’s mobile operators are threatening to abandon uniform tariffs. Thus subscribers could be charged differently for telephony services depending on their locations.

The reason for this move seems to be local taxation. Through Gbenga Adebayo, the Chairman of industry grouping the Association of Licensed Telecoms Operators of Nigeria (ALTON), the operators have made it clear that they are unhappy with the demands of a number of the country’s many states that include imposing taxes and levies on service providers.

This, according to Adebayo, is not a new concern. ALTON has apparently been speaking against such multiple taxation for years while nothing has been done.

The regulator may agree. According to the Executive Vice Chairman of NCC, Professor Umar Danbatta, there are about 46 different taxes directed at the telecoms sector, though it’s not clear whether this includes state governments.

Most notably, perhaps, it seems that few states have supported reform of right of way (RoW) levies, at the suggested rate of N145 (about US$0.19) per linear metre . Admittedly, a few have abandoned RoW charges altogether, but many have rates well above the suggested sum.

According to the local news service The Guardian, Kogi State is currently threatening to shut down some sites over unpaid taxes, while Osun State has started a telecoms installations audit, with the hope of realising N500 million (just under US$ 652,000) in revenue.

Of course an economic downturn and high operating costs haven’t helped. In 2022, operators argued for a 40% hike in tariffs.

This comes at a time when national government is showing some sympathy for operators’ tax difficulties. Late last year we reported that Nigeria had held off on plans to impose a 5% tax on telecommunications services that the Ministry of Finance and the Nigerian Customs Service had suggested would be imposed in 2023.

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