By Zeenat Sambo

TECHDIGEST – It all started like a joke on June 29, 2022 when the Federal Government announced that telecommunications subscribers would pay extra five percent tax on calls, SMS, and data services as a way to generate more revenues that will change Nigeria’s economic situation. Majority of Nigerians were however taken aback by what many saw as a cruel joke meant to further impoverish a poverty-stricken populace.

It is said that it is difficult if not impossible to find God-fearing men in government in this part of the world. But one man continues to stand out as a true man of God who doesn’t believe that people need to be taxed to death before government can generate enough to run the affairs of the state. The Minister of Communications and Digital Economy, Professor Isa Ali Pantami, has from day one maintained a massive opposition to the new tax with the argument that the telecom sector has been taxed enough and it is already contributing a huge chunk of the country’s non-oil revenue. Aside that, Pantami believes the economy is not bright at this time for the masses to be burdened with a new tax regime.

While the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, argued that the new measure was not meant to punish Nigerians but a revenue generation emergency, Pantami consistently spoke against it and worked behind the scene to get the President to suspend it.

Earlier in the month, Pantami came up with the cheering news that President Muhammadu Buhari had approved the suspension of the proposed excise duty on telecommunications indefinitely and constituted a committee to look into the matter. But some other government officials didn’t even allow Nigerians to finish celebrating before they threw spanner in the works.

In a move that has been described as sadistic, the Director-General of the Budget Office, Ben Akabueze, insisted, days later, that the proposed tax remains in effect and would be implemented soon.

“There are extensive studies on this subject about the taxation of telecommunication companies in Africa and other developing countries, and I assure you that the average effective tax rate, which is called the AETR on telecommunications, in Nigeria is below the African average.

“There are several countries in Africa where the AETR on telecommunications is over 90 per cent which is giving rise to the concerns that in some places they may currently be overtaxed, but certainly not in Nigeria.

“Again, on this continent, as of today, we have the lowest tax to GDP ratio. And so, at a time when we face existential revenue challenges, I think that we all need to be really circumspect about what views we take on this matter.”

But Akabueze has been arguing in isolation and has refused to take other variables into consideration.

One of that is the fact that Nigeria’s Mobile Network Operators (MNOs) currently pay more than 40 distinct taxes and levies for providing telecom services which no one can explain why it has be so. We are not sure if there is no plan to kill the MNOs or to discourage more investors from coming into the country.

Going into the macroeconomic variables which Akabueze chose to ignore because doing that favours his narrow argument, core inflation, headline inflation and food inflation are all in excess of 20 percent, unemployment is over 33 percent, underemployment is extremely high, the naira has been on a free fall, cost of goods and services are skyrocketing, purchasing power is at an all-time low in the face of mass excruciating poverty, and yet someone in government wants to squeeze poor Nigerians to death with more taxes!

There is no way the tax can be implemented without directly affecting Nigerian youths who rely on airtime and data to study and conduct businesses

Professor Pantami in his book “Datafication of Society to Foster an Internet Economy” states that “data is the new oil.”

He argues further that: “This has become a new identity for a nation that has depended on oil. Telecom airtime and data is now classified alongside food and shelter as physiological needs. Thus, anything that will jeopardise the increase of Nigeria in the global ecosystem should be rightly suspended.”

It is quite surprising that the same Federal Government that is advocating for a robust digital economy by 2050 and inclusion of all citizens is the same struggling to burden its populace with new telecom taxes. This is because if the 5% telecom tax is imposed, the excise duty which is a production tax will finally get transferred to consumers. The new levy would essentially raise the consumption tax on telecommunications services, such as phone calls and internet data, to 12.5% from the current 7.5% VAT rate.

“Excise duty is introduced to discourage the consumption of certain commodities like alcohol and tobacco. But today, without broadband penetration, how can you perform financial transactions, how can you deliver lectures without that, how can you work in a hospital, these services are a necessity.

”According to the Nigerian Communications Commission (NCC), the sector contributed N3.25 trillion in income in 2021, and based on the sector’s growth rate so far in 2022, the new tax is expected to collect N200 billion over the course of the following year.

“This is to note that telecom companies contribute 2 per cent excise duty to the NCC already and telecom consumers also pay 7.5 per cent for consuming telecom services,” Pantami argued.

To buttress Pantami’s argument that the telecom sector is already being overtaxed, the National Bureau of Statistics (NBS) report stated that the Federal Government made N127.03bn from Value Added Tax on calls, SMS, data, and other information and communication services in the first six months of the year of 2022. This is 10.69 per cent of the total N1.19tn that was collected as VAT within the period under review.

The Voice of the People

Pantami is obviously not alone in the protest against this cruel tax regime. The Stakeholders Consultative Forum on Implementation of Excise Duty have kicked against it. The Executive Secretary, Association of Telecommunications Companies of Nigeria (ATCON), Ajibola Olude, has also suggested that taking cognizance of the hardship in Nigeria at a time like this, the government should rescind its decision to implement the five per cent excise duty on telecommunications operators.

In the same vein, the Chairman of the Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, insisted that the new tax burden would be passed to subscribers.

In the midst of the back and forth surrounding the implementation of the telecom tax, a cross section of students currently on protracted holiday due to the strike by the Academic Staff Union of Universities (ASUU) told Economic Confidential that the proponents of the new tax regime are enemies of the country who are looking for ways to drive the youths crazy.

According to the students, after the government conspired with ASUU to keep them away from their studies for so long, Akabueze and co are now looking for more ways to frustrate them and push them to the wall.

Oreoluwa Adedoyi, a 300 level student of Chemical Engineering at the University of Lagos, stated that “since the strike started, I had to enroll in some online courses to keep up with my studies. All my classes are virtual and I load up to 20GB MTN special data plan which lasts for a week . At a time, that was too expensive for me to afford but I had to keep on doing it to sustain my learning but when I learnt of the proposed increase I was so discouraged that I felt bullied by this Mr Akabueze. Being offline can be quite draining, especially for students like me. I hope the Federal Government will reconsider this.”

Alimodu Mustapha, a cobbler studying at Bayero University, Kano, explained that, “as a result of the unending strike, I started trading online not too long ago. This increased my sales and capital a little due to having to deliver to more clients.”

“Despite the fact that I get little profit from being online, I realise that spending so much money to stay online drains me, but what can I do? I have to purchase data to sustain my business, but when I learned about the tax increase and how it will affect small businesses like mine, I felt disappointed with the government especially the insensitive Mr Akabueze. Whether they increase the tax or not, the Minister of Finance predicted that Federal Government is expected to borrow N11tr by 2023, so why still frustrate us? I wonder how they expect us to cope with the new policy since they are advocating for digital inclusion.

Also, Ifeoma Ugwu, a university graduate said, “when I heard of the increase in telecom tax, I knew the citizens will be most affected as they will bear the brunt of what the telecom providers will push down their throats as a result of any new government policy. We trade mostly on phone and receive classes online as well. So government has no choice but to reconsider this anti-people policy and put the Akabuezes to shame.

Taking a different dimension, a top member of the All Progressives Congress (APC) who wished to remain anonymous came down hard on Akabueze and his accomplices who he accused of trying to sabotage the administration of President Buhari.

According to him, the President is making remarkable progress in infrastructure, security and power and he is trying to leave a very good legacy despite the challenges but some people he called internal saboteurs are trying to get Nigerians angry with the administration and the ruling party.

“Nigerians are already very angry with us in the ruling party over the state of the economy. But as we are trying to placate them and urge them to keep faith with the APC ahead of the elections, some internal saboteurs are working hard to make sure APC loses election in February. If not, why a new tax regime now? Why now?

What is more baffling is that the President has received our advice and suspended the new tax but one Akabueze is saying no, it must go on. See, we need to start investigating some people in this government. Governor Wike has said some hawks in the Villa are working for Atiku. Now I have reasons to believe we have enemies within us. Enemies who want to make sure Asiwaju Bola Ahmed Tinubu and other APC candidates lose elections in February. If not, how can a mere DG of Budget Office be defying both a Minister (Pantami) and the President? Who is he working for?

“Let me urge Professor Pantami to keep drumming it in the ear of the President that this lousy tax regime must not see the light of day. Our people are suffering and angry. What they need is support, not wicked taxation,” the angry politician said.

As it is said in Latin, vox populi, vox dei. The voice of the people is the voice of God. It will be in the overall interest of the government and the people of Nigeria for the former to suspend this obnoxious tax and let my people breathe.

The post As Angry Nigerians Attack DG Budget Office, Ben Akabueze, over Insistence on Five Percent Telecom Tax By Zeenat Sambo appeared first on Tech Digest News.

By Patrick Imo

TECHDIGEST – Nigeria will be rolling out the 5G networks in the next couple of months. This network that is virtually limitless to the extent of including autonomous cars and runs with much faster speeds, vast data capacity and lower latency – response time is expected to underpin entirely new technologies such as self-driving cars, telemedicine, etc. It is as well expected that its security is much more complicated as it may in turn attract cyber intrusions by criminals or terrorists, even when some experts say 5G’s security was taken into account at the point of establishing the technology’s norms.

Nigeria as with many other countries is faced with different challenges in the deployment of 5G mobile wireless communication technologies stemming from improved fiber infrastructure, relaxing regulatory barriers to encourage investors and provision of other physical infrastructure as it is said that over forty thousand base-stations are needed for this deployment.

In the light of the anticipated rollout, Infrastructure Quarterly IQ Magazine, Nigeria’s sole authoritative and incise specialized magazine on Infrastructure news and events with very strong support by the Association of Licensed Telecoms Operators of Nigeria ALTON and the Association of Telecommunications Companies of Nigeria ATCON shall be holding a special Telecommunication Infrastructure Forum targeted at ascertaining Nigeria’s Telecom sector Operator’s level of preparedness for the full adoption of this lightning-fast fifth-generation wireless network – 5G.

READ ALSO: ITU Appoints Pantami To Lead World Summit On Information Society Forum 2022

The forum that shall have the Honourable Minister of Communications and Digital Economy Prof. Isa Ali Patami as the Special Guest of Honour, representations from the Nigerian Communications Commission NCC among other top industry personnel shall run on the theme – Nigeria’s Telecom Infrastructure In The 5G Regime – Drawing Full Benefits Without Tears, is scheduled to hold on May 31st, 2022 at the Sheraton Hotels, Mobolaji Bank Anthony Way, Ikeja, Lagos. It shall attempt at exhausting all the critical and salient issues around Power, Fibre Infrastructure availability in the country, Critical Infrastructure Bill and the Right of Way, Stimulating the Funding of Critical Telecoms Infrastructure and Ensuring Right and Practical Education of the Public on the Adaptability, Social, Economic and like Benefits of the Network when deployed. Other areas billed to touch at the forum are Cyber-Security Assurance and Deployment in the 5G Regime, Dependability of Telcos Operations on Local Contents for Sustainability of 5G and other Networks in our Clime, among other top issues all of which forms the core of sustainable 5G network’s deployment in the country.

A statement from the Telecom Infrastructure Forum Coordinator and Editor of Infrastructure Quarterly Magazine Mr. Patrick Imo confirmed that there will be an array of topmost industry experts from the academics, field-active-professionals, government and political ICT stakeholders alongside local content inputs as per fibre and other ICT materials producers and facilitators led by the Managing Director of Colman Technical Company Limited Mr. George Onafowokan and Managing Director of Mikano Engineering Mr. Firas Mamlouk who at the end of the event, shall draw indisputable lines to ensuring seamless deployment and sustainability of the 5G Network in the country.

“If by this effort we find assurance that the telecoms industry in the 5G regime continues to work towards consumers’ vital health, education and emergency services online, businesses running with friends and families connected, we would have fulfilled our desires,” he concluded.

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TECH DIGEST – The Association of Licensed Telecommunication Operators of Nigeria (ALTON), an industry group, says it had received directives from the Nigerian Communications Commission (NCC), the industry regulator, to suspend access to Twitter.

The President of ALTON, Gbenga Adebayo, made this known in a statement made available to the News Agency of Nigeria (NAN) in Lagos, on Saturday.

The action is connected with Friday’s indefinite suspension of Twitter’s operations by the federal government, two days after the social media giant deleted a tweet from President Muhammadu Buhari, a retired general.

The government had announced the suspension barely 48 hours after the microblogging site deleted a controversial post by Mr Buhari referencing the country’s civil war, and threatening to treat those attacking government buildings “with the language they understand.” Mr Buhari fought during the civil war that claimed over a million lives.

Mr Adebayo noted that the association wished to confirm that its members had received formal instructions from NCC, the industry regulator, to suspend access to Twitter.

“ALTON has also conducted a robust assessment of the request in accordance with internationally accepted principles.

“Based on national interest provisions in the Nigerian Communications Act, 2003, and within the licence terms under which the industry operates; our members have acted in compliance with the directives of NCC.

“We will continue to engage all relevant authorities and stakeholders and will act as may be further directed by the NCC, ” Mr Adebayo said.

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TECH DIGEST – Mobile Network Operators (MNOs) in Nigeria have threatened to withdraw Unstructured Supplementary Service Data (USSD) services to Financial Service Providers (FSPs).

This is not unconnected with the inability of the FSPs to pay whopping N42billion debt they owe the telecommunication service companies.

The MNOs under the umbrella of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), announced their plans to withdraw the services in a statement signed by the Chairman, Engr. Gbenga Adebayo​​​​​​ and the Head of Operations, Gbolahan Awonuga.

​​​​​​​The debt is huge, but telcos shouldn’t withdraw services – NCC

The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta, had in this report disclosed that Deposit Money Banks owe the sum of N42bn for services provided by the mobile network operators through the USSD.

According to Danbatta, indebtedness of the banks to mobile network operators had been an issue over time, but stressed that the NCC was working hard to address the concern.

He said: “The issue of the USSD has become an issue between the telcos and the banks. The telecommunication companies provide the infrastructure which the banks leverage on to provide banking services of all kinds.

“Therefore it is expected that for this service someone should pay. No service is free. The investment in infrastructure that is driving the USSD service is a huge investment that the telcos made.

Despite the glaring indebtedness of Financial Service Providers to telecoms, the EVC said: “The telecommunications companies cannot unilaterally withdraw this service because it will be seen as a subversive act, undermining the digital inclusion strategy of the present government.

We are compelled to withdraw services – ALTON

In response to that ALTON said they are aware of the letter issued by the Minister of Communications and Digital Economy to the Central Bank of Nigeria, seeking a resolution to the on-going dispute between the banking sector (Financial Service Providers (FSPs)) and the telecoms sector over the appropriate methodology to use to charge for USSD services.

ALTON continues: “The background to this problem was that in order to accelerate the adoption of financial services on USSD, the Financial Service Providers (FSPs) partnered with our members to zero-rate the USSD access to end-users, while they bore the cost for the provision of service. Based on this arrangement, the banks took on the responsibility of billing customers and paid our members for use of the USSD infrastructure from the service fees deducted from the customer’s bank account.

“Following the issuance of the USSD Pricing determination by the Nigerian Communications Commission (NCC) which resulted in a price review of USSD service by our members, the banks decided that they would no longer pay for USSD service delivered to their customers and requested our members to charge customers directly for use of the USSD channel.

“This billing methodology where the Financial Service Providers (FSPs) customer is directly charged USSD access fees by our members irrespective of the service charges that the bank may subsequently apply to the customers’ bank account is called “End-User Billing” which the banks specifically demanded that all our members implement. The banks, however, provided no assurances to our members that such service fees charged to customers’ bank accounts for access to bank services through the USSD channel would be discontinued post implementation of end-user billing by our members.

“The removal of these service fees by the Financial Service Providers (FSPs) would have meant that if bank customers were charged only the USSD costs communicated by our members per USSD session, bank customers will be paying far less than what they are currently being charged by the Financial Service Providers (FSPs) which in some instances are as high as N50. Additionally the banks and telcos will be applauded for collaborating towards the financial inclusion objectives of the Federal Government.

“​It has been more than eight (8) months since the Nigerian Communications Commission (NCC) issued an updated pricing methodology for USSD services for financial transactions in Nigeria. The methodology explicitly restricts Mobile Network Operators (MNO’s) from charging the end user for the services and mandates the banking sector to enter into negotiations to settle outstanding obligations and agree individual pricing mechanisms to be applied going forwards.

“During this time, Mobile Network Operators (MNO’s) have continued to provide access to USSD infrastructure and our members have continued to pay all Bank charges and fees to access the Banking industries assets and customers, despite the fact that obligations due from banks to telecoms companies for USSD services has reached over Forty-Two Billion (N42B) Naira.

“​ALTON members have continued to provide these services because our primary concern is that the millions of Nigerian customers who access financial services through our USSD infrastructure every day should be able to continue conducting their transactions. This was given greater importance when customers’ became further reliant on these services due to COVID movement restrictions. Unfortunately, as it has been impossible to agree on a structure for these payments with the banks that do not involve the end-user being asked to pay, the government has been forced to intervene to ensure that a sustainable cost-sharing solution is agreed, that does not disadvantage the consumer in the long-term.

“​We deeply regret that we have reached a point where the withdrawal of these services has become unavoidable, however, we remain committed to working closely with the relevant Ministries and regulators to resolve this issue as quickly as possible. To minimise the disruption to customers, and with the concurrence of the Honourable Minster of Communications and Digital Economy and the Nigerian Communications Commission, on the huge debt to the Network operators; Mobile Network Operators will disconnect debtor Financial Service Providers (FSPs) from USSD services, until the huge debt is paid.

“Therefore, our members are initiating a phased process of withdrawal of USSD services, starting with the most significant debtors within the Financial Service Providers (FSPs) effective Monday March 15, 2021.

“While the withdrawal of USSD service is in place, we encourage our subscribers to kindly explore alternative channels with their Banks”, the statement concludes.

As at the time of filing this report, the Financial Service Providers (“Banks) are yet to issue statements regarding the huge debts and threats by telcos to withdraw USSD related services.

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TECH DIGEST – The Association of Licensed Telecommunications Operators of Nigeria (ALTON), said it will comply fully with the directive issued by the federal government through the Nigerian Communications Commission (NCC) to have National Identification Number integrated into SIM Card registration.

In a statement jointly signed by its Chairman, Engr. Gbenga Adebayo and Publicity Secretary, Damian Udeh, ALTON acknowledged that the process will be inconvenient for subscribers, but is committed to ensuring its members provide the information and support that will be needed to manage the transition.

“In line with the directive on NIN-SIM Card integration, we wish to communicate our intention to fully comply with the two directives issued by the Nigerian Communications Commission (NCC) in the past week, and to work closely with them to overcome this challenge, together,” it said.

It added its focus is on minimising the disruption that it will cause and as the delivery mechanisms are developed, it will provide further information. “We continue to seek for your cooperation and understanding and we work with Government in ensuring a reliable National Identity Ecosystem,” it said.

The umbrella body of all licensed telecom operators also stated that as an industry, it recognises the importance of a strong national identity system and the critical contribution it will make to the accelerated growth of our digital economy.

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