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How State Governments’ Greed For IGR Frustrates Broadband Plan

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In the last few years, Nigerian telecommunications operators have raised the alarm over the multiple taxations levied on them by agencies of state governments across the federation which they claimed was inhibiting the rollout of telecommunications infrastructure.

In April this year, the operators, under the aegis of Association of Licenced Telecommunications Operators of Nigeria (ALTON) called on President Muhammadu Buhari to issue an Executive Order proclaiming telecoms services as critical national security and economic infrastructure as prescribed the Cybersecurity Act 2015.

ALTON also sought the intervention of the minister of finance to review the Amended Taxes and Levies Order 2015, which it adjudged to be inimical to the normal operations of telecommunication operations.

Buttressing their point, the operators said there were 38 taxes and levies charged by the agencies of both federal and state governments on telecom operators. ALTON was concerned that the Amended Taxes & Levies Order, 2015 engendered the institution of multiplicity of taxes across different tiers of government.

National chairman of ALTON, Engr. Gbenga Adebayo, speaking to LEADERSHIP at the weekend said the telecom industry supports many other economic sectors of the economy. “We are also the first layer of critical infrastructure for socio- economic development and security. It is pertinent to state that unless telecoms facilities have first level of protection by government, it will be difficult to provide uninterrupted services to the citizenry,” he noted.

Adebayo said the amended order failed to fix the taxable rate resulting in the imposition of arbitrary levies and charges at the state government levels.

“The industry is also burdened with enactment of laws at the state government levels to legitimate spurious levies and charges on our members which negates the ease of doing business in Nigeria.

“Specifically, item 3 (b) of the Amended Schedule to the Taxes and Levies (Approved List for Collection) Act introduced new levies and taxes under items 12 – 25. Most of these taxes and levies were hitherto contested by our members on the grounds that they were not applicable to telecommunications operations justified by the previous Taxes and Levies (Approved List for Collection) Act 1998.

“It is disturbing that the entire instrument has given the state governments authorisation to coerce and disrupt the operations of our members in order to compel the payment of sundry levies, charges and taxes. Rather than Amended Order addressing the issue of multiple taxation; it on the contrary increased the tax burden of our members and adversely impacted the ease of doing businesses in Nigeria,” said the ALTON chairman.

The 38 taxes/levies charged by state government agencies include: Aviation Clearance, EIA, Site EIA, Business Premises, Planning Permit, Sanitation Fees, Tenement Rate, Signage and Advert, Fire Service, Parking, Effluent Discharge, Social Services Levy, PAYE, Right of Way, Withholding Tax, Location Plan/Site Analysis, Plan Approval (LGA), Building Permit and  Employee Development Levy.

Others are: Operational Permit, Building Fitness, Capitation Fee, Infrastructure Maintenance, Hawking Permit, Way Levy, Shop Rate, Radio & TV, Environmental/Ecological fees, Sewage Fees, Audit Fee, National Inland Waterways Authority (NIWA), fumigation, gaseous emission, refuse collection and disposal, industrial generators and toxic emission and installation of new telecommunication mask.

On June 28, this year, the Rivers State Internal Revenue Service sealed the Port Harcourt regional office of 9Mobile over disputed outstanding tax liability arising from Pay-As-You-Earn (PAYE) of expatriates, erroneously believed by the RIRS to be subject to tax within the Rivers State. 9Mobile had claimed that the expatriates did not reside in Rivers State.

“The conduct of the RIRS in this regard, apart from being a clear contravention of the law, goes against the efforts of government at improving Nigeria’s position on the global Ease of Doing Business index, to encourage foreign investment,” said Adebayo.

This action of RIRS and other state agencies goes against the directive of the  Office of the National Security Adviser (ONSA) that no government agency should seal any BTS site as they were designated Critical National Infrastructure.

The Nigerian Communications Commission (NCC) desires to provide 120,000 kilometres of ubiquitous broadband access to connect all the 774 local governments in the country. But the attitude of several state governments is hindering the effort. The state governments have not relaxed on the drive for internal revenue generation (IGR) especially in the telecom sector which they target as a cash cow.

Nigeria only has 43,000 kilometres of laid broadband cables. However, efforts are on to ensure that an additional 18,000 kilometres of broadband cables are laid to complement what we already have.

Executive vice chairman of NCC, Professor Umar Garba Danbatta said, “No state and no local government was adhering to the National Economic Council (NEC) report on the harmonised Right of Way (RoW) rate, and this is a serious challenge to industry growth and expansion, because state government, federal governments and their agencies are imposing high and arbitrary charges on RoW. Even at that, the NCC did not give up the struggle.”

Danbatta believes that key to solving the broadband problem in Nigeria is the agreement of all the governors of the 36 states of the federation to abide by the National Economic Council (NEC) RoW harmonised price of N145 per meter. The agreement was reached at the last NEC meeting, in Abuja recently.

“This is a major achievement by the NCC, but we still have challenges of fibre cut during road constructions in most states and local governments. Again we are engaging the states and local governments on the need to protect telecoms infrastructure during road constructions. We need a national telecoms infrastructure bill that will protect telecoms infrastructure across the country,” he said.



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