NCC Begins Effort to Unify Tax System in Telecom Industry

NCC Begins Effort to Unify Tax System in Telecom Industry

NCC Begins Effort to Unify Tax System in Telecom Industry

Dr. Aminu Maida, Executive Vice Chairman of the Nigerian Communications Commission (NCC), has expressed concern that the persistence of multiple and inconsistent taxes is discouraging investment in the telecommunications sector. Addressing stakeholders on Wednesday in Lagos, he emphasized the need for a unified tax framework to eliminate barriers to growth.

Speaking at the inaugural Annual Workshop for Attorneys-General on Emerging Issues in the Communications Sector, Dr. Maida stressed that the fragmented and unpredictable nature of the current tax system demands immediate reform.

His remarks follow recent figures highlighting the sector’s fiscal contributions. In 2024, MTN Nigeria—boasting over 90 million subscribers—paid N764.2 billion in taxes and levies, representing a 40.5% increase from the N543.9 billion recorded in 2023, according to data published last year.

In 2023, the telecommunications sector contributed more than ₦2.4 trillion in taxes, solidifying its position as one of the Nigerian government’s leading sources of revenue. During the first quarter alone, telecom companies generated ₦119.87 billion—over 10% of the nation's total tax income.

However, industry players have consistently raised concerns over the heavy fiscal pressures they face. As of August 2024, reports from industry insiders and the Association of Licensed Telecom Operators of Nigeria (ALTON) revealed that telecom companies were subject to more than 50 distinct taxes, levies, and regulatory charges from federal, state, and local government agencies.

The issue of multiple taxation has been a longstanding one, with various attempts made to shield operators from its impact—most of which have yielded little success. In addition to these financial burdens, telecom companies continue to incur substantial costs in repairing fibre optic cables damaged by vandalism.

The executive highlighted that the financial strain—alongside issues such as overlapping regulations and inconsistent right-of-way policies—has fostered an environment that hampers infrastructure development, especially in underserved areas.

Speaking at the workshop, the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi, emphasized the importance of establishing a unified legal and regulatory structure to support the communications industry.

He cautioned that disjointed levies and acts of infrastructure vandalism constitute economic sabotage, referencing the 2024 incident in Ogun State where conflicting tax demands led MTN to halt its expansion, as well as the 2023 attacks on base stations in Kano.

Fagbemi stressed the need for the justice system to hold offenders accountable and urged collaboration among the executive, legislative, and judicial branches to safeguard the sector's sustainability. He advocated for aligning legal and policy frameworks, standardizing right-of-way regulations, and streamlining digital taxation systems.

Fagbemi described the communications sector as a key engine for innovation and inclusion, as well as a vital component of the national economy. He warned that over-taxation and disjointed regulation risk undermining Nigeria’s digital advancement.

Echoing this sentiment, Maida affirmed the NCC’s readiness to collaborate with stakeholders—particularly the Attorneys-General—to establish a regulatory environment that encourages investment.

He emphasized that streamlining the tax structure is a crucial step in dismantling persistent obstacles to growth and advancing the nation’s broadband expansion and digital inclusion goals.