March 13, 2019

Tension in telecom sector: Telcos may review tariffs over double taxation

…Seek harmonisation of regulation on environmental impact assessments

By Prince Osuagwu (Hi-Tech Editor) &Emeka Aginam

There appears to be tension in the telecom sector as  telecommunications operators in the country threaten to review tariffs upwards if multiple regulation and taxation on their operations continue.

The telcos through their umbrella body, the Association of Licensed Telecommunications Operators of Nigeria, ALTON are concerned that non harmonisation of taxes and levies by different tiers of government is stressing their businesses and makes return on investment difficult to attain.

Their agitation followed a letter to the Federal government seeking clarification on whose right it is, between the federal and state governments to issue demand notices on Environmental Impact Assessment.

The letter which ALTON on behalf of the telcos sent to the Director, Department of Environmental Impact Assessment, EIA, Ministry of Environment, alleged that the telecom industry was being over burdened with taxes and levies and that operators may be forced to  review tariffs to offset the effect.

The letter signed by ALTON Chairman, Engr Gbenga Adebayo reads in part: “We have received complaints from our members that they have been receiving demand notices for Environmental Impact Assessment, EIA, payment from some states government Ministries of Environment, which we considered as an aberration of the existing law”.

With this development, we want to know if:

*The Federal Ministry of Environment has ceded the EIA oversight functions to some state Ministry of Environment to issue EIA Certification to our members.

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*Some States Ministry of Environment, as the case may be, can conduct EIA process to our members without recourse to the Federal Ministry of Environment and National Environmental Standards and Regulations Enforcement Agency, NESREA.

*The Statutory responsibility on environmental issues of the Federal Ministry of Environment, FME, has been transferred to  state government.

*The states now have power to collect ecological fund from private sector after payment has been made to them by the federal government.

“We kindly request from the Federal Ministry of Environment to clarify these positions, to  guide us in our dealing with the situation and to advise our members accordingly”   According to him, “Tax is regarded as an oxygen to development but if oxygen is too much, it could lead to disaster. Our members are responsible corporate citizens of the country and natural partners in progress that follows due processes”.

When Hi-Tech further engaged Adebayo on the issue, he argued that his members obtain EIA from the Federal Ministry of Environment through NESREA in collaboration with each State Ministry of Environment, but regretted that the States are now coming to demand for another process directly from telcos, amounting to multiple taxation and charges.

He alleged that  Tax and Levy Amended Order 2015 signed by the former Minister of Finance in the last administration, created a lot of confusion in the taxes and levies regime, negating government ease of doing business programme by making the environment harsh to do business in.

He called on the federal government to look at the order again with the view of harmonising processes and making the environment free for business.

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Some industry practitioners who spoke to Hi-Tech also regretted that the issues of EIA Demand Notices by some states has led to sealing of many telecommunication sites causing issues in quality of service which eventually leaves the subscriber frustrated.

A Lagos-based telecom Engineer, Mr Chima Obasa said: “This issue of double taxation has been a reccuring one. The federal government should look critically at the demands of  the telecom operators, particularly in the area of declaring telecommunication infrastructure as Critical National Infrastructure. That is the only way we will make progress, forestall incessant harassment on the operators and avert their plan to take advantage of these issues to review the tariffs upwards which will not affect only the subscribers but the economy too.”