Governments Milk Telcos with Taxes, Levies

Omobola Johnson, minister of Communication Technology has said that 70 per cent of the investment by the telecommunications operators goes to various tiers of government in the form of taxes and levies.

Johnson, who spoke during a Small and Medium Enterprises’ Summit at the World Economic Forum on Africa in Abuja on Wednesday, said several governments in the country were laying too much burden on the telecoms operators.

She listed other challenges facing the operators to include cable cuts in different parts of the country, blowing up of base stations, high cost of right of way and refusal of permit for critical infrastructure.

“Out of every naira investment in the sector, 70 kobo goes into different shades of taxes,” the minister said.

To tackle the problem of multiple taxation, Johnson said the Ministry of Communication Technology had initiated a programme that would reduce the tax burden on the states and increase investment in telecoms infrastructure.

She said, “We have four states that have signed up for the Smart State Project. These are Lagos, Anambra, Ondo and Gombe states. What they are doing is to work with us to remove all the bottlenecks to rolling out ICT infrastructure so that we can have better broadband and better voice services in their states.

“We are hoping to enrol all the 36 states but we want to start with the few states. All the telecoms companies have signed up to this. The states have said that they would reduce the taxes on ICT infrastructure; ensure that the base stations are protected; reduce the cost of right of way to lay fibre; and ensure that the fibres are also protected.

“The telcos have also said, ‘If you give that to us, we will increase investments in your states to ensure that you get more broadband and better voice services’. It is a quid pro quo. What that does is that it allows us to roll out infrastructure in a more systematic manner.”