President of the Association of telecoms Companies of Nigeria (ATCON), Engr Olusola Teniola, has called for review of all taxes charged telecoms operators with the aim of relieving investors’ from over-taxation.
Speaking in a national TV Business phone-in programme monitored in Lagos, on the observed jerk up of tariffs’ on telecoms services including calls, sms and data usage due to the new VAT regime of 7.5%, he said “First of all, as ATCON, we always work to have a seamless pricing system that will enable Nigerians talk and run their businesses on telecom platforms with ease.”
“Since after the recession, the government had been working on introducing sector specific tax which the CST that was being pushed by Senator Ali Ndume to 9% or an overall tax increase of VAT to 50%. That is from 5 to 7.5% which has now been adopted by the government.
“Therefore, from the first of February, all calls including data charges, internet calls, voice, sms and all telecoms services has gone up by the new regime of VAT.
It is very important to note that the objective of telecoms is for citizens to make calls with ease and friendly pockets.
Sharing some latest industry statistics, ATCON boss revealed that “Telecoms figures show that Nigerians able to afford 1G monthly spent about 2% of their monthly wage for that. The issue really is that we have a lot of Nigerians below the poverty line. In fact estimates suggest about 90m Nigerians are poor. These are Nigerians who cannot afford more than $2 per day because they are not earning.”
“Considering this, the next challenge for the industry is how to reduce the cost of data and other telecom services so that many even poor Nigerians can leverage on that to move out of poverty.
On how the VAT hike will play out, he said “Recall that the government recently jerked up minimum wage to about N30,000. Yes, it will assist those at the bottom of the poverty pyramid; on the other hand, we have this VAT increase.
In his submission, Engr Teniola averred that “Nigerian is in need of a balancing system. As in how do we cater for the humongous concurrent expenditure and the highly needed capital expenditure?”
“To me, it’s simply to make the private sector environment vibrant to grow their businesses and the economy at the same time. Telecoms operators need conducive environment to invest in infrastructure.
“So government itself is also measured on the way and manner it drive the infrastructures.
I guess Nigerians are hoping that the short term pains will be taken over by the long term gains if the government gets it right.
“Building a digital economy future for young Nigerians which repr4esents about 85m Nigerians is very important.
Otherwise, we are taking the pains with the hope that things will get much better in the near future.
Explaining more on the current Quality of Service (QoS), ATCON President recalled that “Taking our mind back to 2001 when the industry was deregulated, Nigeria has only 500,000 subscribers.
“However, since the advent of GSM via the licencsing plus billions of dollars invested by MNOs, now we are talking about 170 to 180m subscribers. That is unprecedented.
Lack of power remains a key drawback to telecoms growth as every base station is powered independently. We also face infrastructure vandalisms including fibre cuts on a daily basis, BTS being shut down by MDAs seeking additional revenue.
“Besides, we have got to deal with multiple of taxes coming from all tiers of the government and in some cases communities. Last count is 39 taxes paid by telecom companies
And if this CST tax comes through even though we are fighting it, it will jump to 40 and that will mean more drawbacks.
“Basically what we are doing at ATCOIN is working and collaborating with government to ensure that cost of doing business falls within manageable limit for our members so that we can remain in business.
“We are also working on how the cost of doing internet calls and driving the new digital economy is made seamless for every Nigerians.
What we are advocating at ATCON is that we have a collaborative discussion with both government and the private sector to ensure that we all are heading the same direction.
“Yes we know that government requires the funds to drive growth and run government, it has to be balanced with the ease of doing business.
We believe that as soon as ease of doing business is getting better, there is the likelihood that cost of calls and data will reduce.
He assured that “At ATCON, we are building the largest telecom system in Africa where not only the rich, but the poor can also enjoy and grow their businesses and life.”
