By Emeka Aginam
The Association of Licensed Telecommunication Operators of Nigeria, (ALTON) has picked holes in the nation’s tax structure, saying the ugly menace of multiple taxation has to be removed to attract more investors into the nation’s telecoms industry.

Chairman of the group, Engr. Gbenga Adebayo who spoke recently at the ICT Taxation, Clean Environment summit told his audience that multiple taxation on telecom operators must be addressed, particularly at the state and local levels where it is becoming worrisome.

“Our members are constantly harassed, their base stations and offices locked indiscriminately by governments, especially at the lower tiers over alleged refusal to pay taxes and levies.

“Our major challenge stem from the activities of states and local governments. Members have brought documents evidencing requests for taxes and levies that are, in our view, outside of what is prescribed by law. We hear also with evidences from our members, instances where state and local government authorities have physically invaded offices, locked up base stations and employed other unwholesome tactics to enforce these taxes and levies,” he said.

He added that the law specifically states that “only appropriate tax authorities shall assess or collect taxes. It does not mention consultants.”

“The immediate and long term effects of discouraging business include a negative impact on ability to create new jobs due to high operating costs, loss of revenue for government in terms of taxes which can be legally obtained, slow or no economic growth, economic distress, closure of businesses and others.

“In addition to the statutory taxes levied on operators, telecommunications operators pay Annual Operating Levy (AOL) of certain percentage of earnings to the Nigerian Communications Commission (NCC) and are required in addition to pay various rates and charges to other Federal Government agencies (e.g. Consumer Protection Council, Nigeria Lottery Commission, federal and state ministries of environment etc), authorities in every state and local Government in which they operate.

For a healthy operations of Nigerian telecoms industry, the ALTON President recommended, among others, that “there should be certainty in rates and certainty in the mechanism of collection – Rates should be as enshrined in statutes and government rather than tax consultants should collect taxes the higher the consultants the more the fees.”
Other recommendations, among others, by Adebayo are:

lThat intensive public education and stakeholder engagement is imperative for better understanding of issues and consequence of existing practices; such education should focus for example on the impact and long term effect of multiple taxation on the economy and businesses in particular.

lThere is a need to highlight the consequences of multiple taxation which includes the relocation of businesses outside Nigeria evident in the manufacturing sector of the Nigerian economy, downsizing and retrenchment of staff, unemployment and loss of revenue to Government;

lThat challenges and conflicts in existing legal framework should be addressed. For example: conflicting demands fo same a~ud similar requirements by Federal and State Ministries, Department, Agencies (MDAs), Environmental Impact Assessments (EIA) handled by the Federal Government are not recognized by state governments.