The Nigerian Communications Commission (NCC) has drawn the attention of states’ attorneys general and revenue agencies to the negative consequences of multiple taxes on the telecommunications sector.
The NCC said it is high time the country streamlined taxes in the communications sector, stressing that the issue of multiple and inconsistent taxes continued to deter investment.
Checks showed that as of August 2024, the telecommunications sector is currently plagued by over 54 different taxes, including effluent discharge levy, ecological levy, capital gains tax, and withholding tax, among others.
In Lagos, yesterday, at the maiden edition of the yearly workshop for attorneys-general organised by the NCC, the Executive Vice Chairman of NCC, Dr Aminu Maida, said the workshop reflected the Commission’s belief that collaboration is not optional, but essential. He stressed that no sector, especially one as dynamic and impactful as communications, can be effectively regulated in isolation.
Reminding participants of the importance of telecommunications, estimated to be worth $76 billion, Maida said the sector is an enabler of innovation, commerce, governance and inclusion, but that to fully unlock its potential, there is a need to tackle a range of challenges that cut across legal, regulatory, fiscal, and operational domains.
“This is where your role, as Attorneys-General, becomes critical. You are not only the Chief Law Officers of your states; you are also policy influencers and key partners in shaping the legal frameworks that support national development. Your insights and guidance help ensure that innovation happens within a structure that promotes fairness, accountability, and long-term stability,” he stated.
Maida said there was a need for the review of the Nigerian Communications Act (2003), to streamline taxation in the communications sector, address regulatory overlaps and protect Critical National Information Infrastructure (CNII).
The AGF, Lateef Fagbemi, said the communications sector remained one of Nigeria’s most dynamic and rapidly evolving sectors. Churning out statistics, Fagbemi, who said as of Q1 2025, NCC data showed over 220 million active voice subscriptions and a broadband penetration rate exceeding 32 per cent, stressed that this level of connectivity powers critical services, from remote education to financial inclusion, across both urban and rural areas.
He said the President Bola Tinubu-led administration is committed to leveraging advances in the communications sector to drive national development; however, several challenges continue to hinder progress.
According to him, these challenges include multiple and excessive taxation by federal, state, and local governments, destruction of telecom infrastructure, especially in conflict-prone areas, regulatory overlaps that confuse operators and complicate compliance and delayed broadband rollout, largely due to right-of-way issues and inconsistent state policies.
Citing several instances of wanton destruction of telecom infrastructure, including the 2023 vandalisation of telecoms infrastructure in Kano, Fagbemi called for a harmonised regulatory environment.
He recommended, among others, harmonised legal and policy frameworks across all levels of government, establishing a federal, state regulatory coordination forum, adopting and implementing uniform right-of-way policies, joint enforcement of infrastructure protection laws and accelerating efforts towards national digital transition.
Speaking at the event, the Chairman of the Presidential Committee on Tax Policy and Fiscal Reform, Taiwo Oyedele, highlighted several key changes already implemented in the tax ongoing tax reforms, including the reduction of withholding tax rates, notably from 10 per cent to two per cent for telecommunications infrastructure providers, and its removal for sectors such as manufacturing, to improve cash flow for businesses.
Oyedele also revealed that the tax-to-GDP ratio had increased to 13.5 per cent in just two years, and the government’s revenue used for debt servicing had reduced from almost 100 per cent to under 50 per cent within the same period.
While acknowledging that these macroeconomic improvements might not immediately resonate with the average citizen, he likened them to planting a tree, where the roots (macros) must be strong for the fruits (micros) to appear.
He added that the reforms had created higher exemption thresholds for small businesses, stating that data indicated only the top three per cent of the informal sector could pay taxes, leading to the legitimate exemption of the remaining 97 per cent.
Further, Oyedele mentioned the progressive nature of the reformed tax system affecting income tax, value-added tax, and capital gains tax, along with the elimination of taxes on investment and capital.
Addressing the multiplicity of taxes and outlook, Oyedele lamented the excessive multiplicity of taxes and collection agencies in Nigeria, stating that over 60 federal agencies collected taxes and levies, a situation he believed was unparalleled globally.
He cited an example of a manufacturer whose truck accumulated 73 different stickers and paid over N700,000 in various taxes and levies on a single journey from the North to the South, making goods unaffordable for the urban poor.