Lagos earned N4.6bn from telecom companies in 2019 —Report

A research conducted by the Nigerian Communications Commission (NCC) has shown that Lagos State Government earned a total of N4.6 billion from different charges from telecoms operators in 2019.

The study examined the quantum of taxes, levies, and fees collected by state governments and their impact on the digital economy agenda of the Federal Government.

The report stated that the Lagos State Government collected the highest amount of taxes, fees, and levies from telecoms operators in Nigeria.

The telecoms companies that submitted the amount paid as taxes, levies, permits, and fees to Lagos State Government included Airtel, MTN, 9mobile, IHS Nigeria, VDT Communications Limited, and ATC Nigeria.

Analyses of the report showed that MTN paid N4.52bn to the state government; Airtel paid N75.72m; and 9mobile paid N11.6m.

Also, IHS Nigeria, a telecom infrastructure service provider company, paid N66.12m to the Lagos State Government in 2019.

VDT, an Internet service provider, paid N2.84m while ATC Nigeria, a telecoms infrastructure company, paid N2.08m.

Findings showed that Lagos State accounted for 32.36 per cent of the total taxes, levies, and fees collected by all states in the country.

Next to Lagos State, the study revealed that Gombe State collected 10.29 per cent of the total taxes, levies, and fees of all the states, followed by Delta State with 8.91 per cent.

The study found that taxes charged by state governments on telecommunications operators in Nigeria have a negative impact on their expansion and coverage of unserved areas.

It said, “This was shown in the positive relation that existed between state-level taxes and high unserved areas within the state.

“Nevertheless, other bills and charges such as fees, permits, and others have a positive impact and result in lower unserved areas within the state. Levies as studied do not have a statistically significant impact on unserved areas.”

Analysts at the NCC recommended a review of the government policy on taxation in order for the country to fully reap the socio-economic benefits of the telecommunications sector.

The report said, “Government clearly has a right to impose taxes on businesses that operate and benefit from the public amenities, infrastructure and social services it provides. The expectation however is that a balance can be struck between the legitimate expectations of government and the certainty and fairness businesses expect for them to pursue and achieve their business objectives.

“Uncertainties over taxes and levies affect investment decisions and the anticipated taxes and levies are expectedly built into the cost of services and products and ultimately passed on to subscribers. There is, therefore, a need for urgent action on multiple taxation of the telecoms industry.”

The commission said due to the critical nature or services provided by the telecoms sector to the Nigerian economy, there was a need for urgent action to address the taxation challenges in order to avoid a slump in the sector and Nigeria in general.

The regulatory body advises the government to pursue the implementation of the National Tax Policy and the establishment of a Telecom Finance Corporation to provide additional investment for the industry.

It called on the Nigeria Governors Forum to ensure the implementation of the resolution of the National Executive Council on multiple taxation and regulation.

-The Punch