ICT Firms’ Tax Rises By 158%
TECHDIGEST – Tax from firms in the information and communication sector rose by 158.51 per cent from N51.05bn in the third quarter of 2021 to N131.97bn in the corresponding period in 2022, Company Income Tax, CIT, data from the National Bureau of Statistics have shown.
The ICT sector was one of the highest contributors to CIT in nine months of 2022, having paid N317.05bn during this period.
The government raked in N810.19bn as CIT in Q3 2021, 13.41 per cent higher than N714.40bn in the previous quarter.
The NBS report stated, “In terms of sectoral contributions, the top three largest shares in Q3 2022 were manufacturing with 28.76 per cent; information and communication with 27.31 per cent; and financial and insurance with 8.81 per cent.”
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In 2021, the Federal Inland Revenue Service revealed that MTN Nigeria Communications Plc and Airtel Networks Limited were two of its top-performing taxpayers.
In a statement signed by MTN’s company secretary, Uto Ukpanah, “In 2021, MTN Nigeria’s total tax contribution to all government agencies including the FIRS amounted to N757.6bn while FIRS collected a total of N6.4trn tax revenue in the year.
“Specifically, MTN Nigeria paid a total of N618.7bn in direct and indirect taxes to the FIRS in the 2021 tax year, representing approximately 13.5 per cent of the total FIRS collection for the year.”
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According to industry experts, the telecoms sector is one of the most taxed sectors in the economy.
A report titled ‘Taxing Nigeria’s subnational economies to oblivion’ by SBM Intelligence recently revealed that the industry suffered from over-taxation because of its sustained growth in the last 20 years.
It said, “At the federal level, telecommunications companies are expected to pay taxes such as Companies Income Tax, the Capital Gains Tax, Withholding Taxes, Stamp Duty, National Industrial Training Fund, Employees Compensation Scheme, the Tertiary Education Trust Fund, National Housing Fund contributions, Contributory Pension Schemes, and customs duties.
“These taxes are applicable to all incorporated companies in Nigeria. There are also sector-specific taxes and levies such as the Annual Operating Levy paid to the Nigerian Communications Commission by all holders of licences issued by the regulator, the National Cybersecurity Fund, the National Information Technology Development Fund Levy and Right of Way charges.”
The Minister of Communications and Digital Economy, Professor Isa Pantami, stated that telecom firms pay about 41 taxes across both federal and state levels.
He said, “The ICT sector is being overburdened with so many categories of tax. If care is not taken, this is going to jeopardise the achievements and gains we have recorded so far in the sector.”
The Chairman, Association of Licensed Telecom Owners of Nigeria, Gbenga Adebayo, also said, “This is because of the 39 multiple taxes we already paying coupled with the epileptic power situation as we spend so much on diesel.”
Source: Punching.com
