Telcos Raise Alarm over New FG Levy Order

By Chike Onwuegbuchi |   04 September 2015   |   1:02 am  


PIQUED by the new federal government levies Act (Amendment) Order, 2015; telecommunications operators have raised alarm over the increased multiple taxes and fees at local, state and federal levels.

According to them, the new federal government levies Act (Amendment) Order, 2015, amended the Taxes and Levies (Approved List for Collection) Act, Cap. T2, Laws of the Federation of Nigeria, 2004.

The Act was previously referred to as Taxes and Levies (Approved List for Collection) Decree, No. 21 of 1998.
Reacting to the new taxes, telecommunications operators said that the ‘Golden Goose’ effect has made federal, state and local governments activate their tax-raising powers, leading to multiple taxation of telecommunications companies.
According to Gbenga Adebayo, chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), the environmental (ecological) levy, is a levy already being demanded in Imo and Abia States from operators whose masts and base transceiver stations (BTS) are located in the states.

The overall effect of the instrument gives legal recognition to the collection of this unwholesome levy and other states to enact similar laws.

Also, the Infrastructure Maintenance Charge or Levy, is a charge introduced by the Lagos State Public Private Partnership Law 2011 enabling the state government to collect tolls on selected highways.

The implication is that by this recognition Lagos State may extend levies to other infrastructures within the states and other states will begin to emulate the trend.

Adebayo further stated that the potentially troublesome aspect of the instrument is that, apart from recognizing and approving, it does not fix the taxable rate; hence the relevant tier of government is at liberty to arbitrary fix or increase the rate if it chooses.

Other states may begin to enact laws similar to the Rivers State’s Social Service Contribution Levy & others.
“The most disturbing aspect of the entire instrument is that instead of addressing the issue of multiple taxation, it effectively increased the tax burdens of individuals and businesses in Nigeria.” He added.

Engr. Lanre Ajayi, president, Association of Telecommunications Companies of Nigeria (ATCON) said that multiple taxation is one of the factors discouraging investors from investing in infrastructure required for broadband penetration which has hindered the quest for the country achieving the 30 percent broadband penetration target.

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