State governments’ crude revenue mobilisation approach threatening ICT

• Govs refuse to commit to N145/linear meter on RoW
• Agencies impose multiple taxes, levies on operators
• NCC wants outright removal of telecoms Excise DutyBut the ICT industry is said to be under serious pressure from state governments and their agencies, which see the sector as a cash cow, thereby harassing telecoms operators and shutting down base stations.

This challenge posed by State Governments to the growth of the industry came to the fore again in Lagos at the Association of Telecoms Companies of Nigeria (ATCON) organised Telecoms Executives and Regulators Forum (TERF) 2023 with the theme: ‘Success Factors and Barriers to National Broadband and Digital Economy Aspiration’.

Leading the charge, the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta, stated that while there are barriers to broadband deployment in the country, ranging from the issue of the right of way (RoW), fibre cuts, high capital requirement for deployment, multiple taxations and regulations, among other challenges, the NCC is navigating regulatory complexities, digital divide and literacy, security concerns with firmness and increased collaborations with necessary stakeholders such as ATCON to create measures towards tackling the challenges.

On the RoW challenge, the EVC said there are about 46 different taxes directed at the telecoms sector at the moment. He said such charges and levels, coming in various names, are imposed on telecom operators by some agencies and tiers of government, especially at the state and local levels.

Danbatta said the challenge translates into greater economic burdens on telecom subscribers in the country. Emphasising the importance of broadband infrastructure, which aids transport, finance, governance, health and even the sustainable development goals (SDGs), Danbatta revealed that only a few states have implemented the N145/linear meter agreed by the Nigeria Governors Forum as far back as 2020 and enshrined in the New National Broadband Plan 2020 to 2025.

While states like Imo, Plateau, Kwara, Enugu adhered to the N145 per linear meter, others such as Anambra, Ekiti and Kaduna implemented zero RoW charges to enable rapid infrastructure build-out for economic development.

But Lagos State is said to be charging N1500. Bauchi State, N1, 000; Delta State, N2, 705; Abia State, N3, 000; Kwara State, N5, 500; Kano State, N2, 753; Borno State, N1, 650 and Sokoto State, N1, 600, among others.

Danbatta also used the TERF to canvass that the telecoms industry should be exempted from any excise duty, as the services being provided are not luxury services.

According to him, while the recent suspension of the five per cent excise duty on telecoms services was commendable, what the industry needs is a total exemption from any excise duty.

To this end, the NCC boss said the Commission has been engaging with the Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, to highlight the current tax issues in the industry and why telecoms should not be mentioned about excise duties.

Speaking as a panelist at the forum, NCC’s Head, Digital Skills and Services Unit, Digital Economy Department, Mrs. Hauwa Buba-Wakili, stressed that the inconsistency in RoW charges remained a major limiting factor in bridging access gaps in the country.

Stressing that a huge gap still exists and needs to be bridged, Buba-Wakili, referenced the GSMA, which said 95 per cent of the population have broadband access, “but only 55 per cent are using it. That is an access gap of 40 per cent.”

Calling for a reduction in taxes imposed on the sector by state agencies, the NCC chief also stressed the need to bridge the literacy gaps in the country.

In his goodwill message, the Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said the problems confronting the sector remain, stressing that it has been the same for the past five years.

Adebayo said: “We shouldn’t gather here next year and still discuss the same issue we had this year and which we have had in the last five years. We still battle multiple taxation from states and their agencies! They still shut down telecom sites arbitrarily.

“I think the regime of national tariff should be reconsidered urgently. I think unfriendly states, those charging more taxes should be made to pay more for telecom services.”

Speaking earlier, the President of ATCON, Tony Emoekpere, said the forum was aimed at providing a unique atmosphere for key industrial regulators to provide keynote addresses on critical issues in the telecom sector. While also highlighting multiple taxations as one of the challenges the industry is battling with, he said addressing these challenges would attract more investments into the industry and propel its growth.

“This industry is fast-growing and it has been reported to have contributed over 16 per cent to our national GDP. The industry can do much better if some of these issues we are having are addressed,” he said.