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  • Updated: February 07, 2024

NCC calls for tax reduction for telecom sector growth

NCC calls for tax reduction for telecom sector growth

The Nigerian Communications Commission has urged state and local government councils throughout the nation to reduce the taxes levied on telecommunications businesses, claiming that a high tax burden will hinder the sector's expansion.

The Federal Government announced in its Fiscal Strategy Paper and Medium-Term Expenditure Framework for 2024–2026 that it will impose a five per cent excise tax on communications services to increase its income base.

Per President Bola Tinubu's directive to the NCC, NCC Executive Vice Chairman Aminu Wada Maida bemoaned the challenge of drawing in foreign investments in the telecom sector, given the existing levies of 50 to 55 per cent levied on operators.

Maida claims that the administration of the NCC has made the decision to launch a national advocacy campaign to persuade state and local governments, along with other relevant parties, to lower the levies they impose on the operators, particularly the various taxes and Right of Way charges.

During a Q&A session with the media on Tuesday, Maida made the comments at the Digital Economy Complex in Mbora, Abuja.

He said, “We are going to be going on an advocacy campaign to see how we can convince the states to remove some of these obstacles like Right of Way and multiple taxations because I have seen some studies which indicate taxation is almost 50% getting to 55% in some areas in this country.

“And you would agree with me that if we are trying to bring in foreign investment that is not a good picture to paint,” the NCC boss said.

He pleaded with states to think about the long-term gains they would experience from permitting large investments in the industry since job possibilities would be generated alongside other value chains in the industry.

A level playing field for all stakeholders was more important to the commission than maintaining an amicable relationship between the two telecom behemoths, MTN Nigeria and Globacom Network, he revealed.

He said that to propel the telecom sector and guarantee that it keeps making the anticipated contributions to the nation's Gross Domestic Product, the commission has created a strategic strategy built around five pillars.

The EVC stated that to resolve the issues, the commission would implement "a total consumer experience." The EVC highlighted the difficulties related to the quality of services provided by Internet service providers and mobile network operators.

Additionally, he counselled customers who were complaining about their data running out to examine their own devices, services, and digital services they were using without taking into account the financial consequences. This was because the majority of the issues were related to the kinds of phones they were using.

According to Wada, "Our strategy will be to go in the direction of these stakeholders' expectations. For me, it all begins with the customer, and the customer has very basic expectations: high-quality service.

“I don’t think you can say anything more than that.  Quality of service and this quality of service, we are talking about a total consumer experience not just about drop calls or I can’t make a call.”

He added, “There is a total quality of experience right from how do you find and select the right network to use, how do you onboard onto that network talking about SIM registration process, process of linking your SIM to your NIN and of course after you have gone through all of that when you are using it, how easy is it for you to select a tariff, how transparent is the tariff, how are you supported by the entire host, how do you onboard from the network, these are important.”

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