Nigeria Plans to Reduce Taxes for Telecom Companies

Plans to lower taxes on telecommunications infrastructure have been revealed by the minister of communications technology Omobola Johnson. This is to encourage companies, invests more on networks in Nigeria. According to the minister, for everything that is spent on infrastructure, about 70 percent of it is spent on taxes. Therefore, the ministry is set to bring it down to a much more reasonable level at 30 to 40 percent.

Mobile-phone companies including Johannesburg-based MTN and Airtel of India have examined ways to offload networks to reduce exposure to costly African infrastructure.

Apart from taxes, Nigeria operators are also faced with the face the challenges of unreliable power supply and the threat of bomb attacks from militants in the North. MTN, the Nigerian market leader, and Airtel were both fined earlier this year for poor service standards in the country.

While Nigeria’s laws allow only the federal government to tax mobile-phone companies, states and local authorities have found other ways to raise cash by heavily levying operators’ infrastructure, including towers and base stations, Johnson said. Regional governments should not charge a retail store 10 million naira ($62,000) and phone companies 100 million naira for the same-sized space, she said.