Telcos ask FG to remove ‘nuisance taxes’ as 5% duty on recharge cards takes effect June 1

Gbenga Adebayo, chairman, Association of Licensed Telecommunication Operators (ALTON), has asked the federal government to remove “nuisance taxes” placed on operators in the sector.

Nuisance tax is a tax imposed as a percentage of the selling price of goods or services, payable by the customer and transmitted by the seller to the taxing authority.

Adebayo said this on Sunrise Daily, a Channels Television programme on Monday.

Last week, TheCable reported that President Muhammadu Buhari had approved the collection of five per cent excise duty on telephone recharge cards and vouchers.

The new 5 per cent duty would add to some of the taxes levied on telcos in the country, including tertiary education tax, companies income tax, value-added tax, right of way charges, annual operating levy, among others.

Speaking on the levies, Adebayo said operators faced about 36 levies and taxes, and an additional 5 per cent duty on recharge cards would take effect on June 1. 

“The behaviour of government is not helping things for anyone. As at today, we have about 36 levies and taxes against operators. An additional 5% excise tax has now been considered effective for the first of June. All of these affect the sector, and that’s why we want the regulators to see that this is where we are,” he said.

“Regulators should look at the challenges that we are facing. Government should intervene where they can intervene and I must say not in the way of a bailout but to use the regulatory instruments to get what we want for us.

“The sector should be declared as national critical infrastructure. When this is done, it becomes important like the oil and gas sector across the country. We’re saying any negative impact on the telecommunication sector will affect the entire economy.

“There are levies and taxes defined in the statutory, we have no objections to those ones. The nuisance taxes are the ones that are problematic. If the government says they will charge effluent discharge tax on operators, what is that, we are not an oil service company. What is environmental sanitation tax on telecommunication companies.”

TheCable had reported that the telcos have asked for upward reviews in voice calls, short message services (SMS) and data costs.

The group said the recent excise duty of five per cent on telecom services will further increased the burden of multiple taxes and levies on the industry.

Meanwhile, the Nigerian Communications Commission (NCC) had said it will not allow any tariff increase by the telecommunication companies without adequate approval.