Telecom taxation: ALTON berates RIRS over sealing of 9Mobile’s office in Rivers State

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By Oluwatobi Opusunju

The Association of Licensed Telecommunication Operators of Nigeria (ALTON) has condemned the Rivers State Internal Revenue Service (RIRS) for sealing 9Mobile’s regional office in Port Harcourt, Rivers state, in what the telecom association described as illegal and counter-productive to government’s plan of improving the global Ease of Doing Business index to attract more foreign investment. ALTON is the industry body of all licensed telecommunications operators in Nigeria.

The RIRS had sealed off 9Mobile/ EMTS’ Port Harcourt Regional Office (“EMTS’ Premises”) based on an alleged tax liability of N107,958,536.96 arising from the Pay-As-You-Earn (PAYE) of expatriates.

But according to 9Mobile in a letter to ALTON, the expatriates were erroneously believed by the RIRS to be on its payroll, stating further that it was not indebted to the Government of Rivers State for the alleged tax since it does not have any expatriate(s) on its payroll residing in Rivers State.

The telecom company said all entreaties to meet with the agency for a reconciliation was rebuffed, rather the RIRS has compelled it to make a payment of 30% of the alleged sum amounting to N32,387,561.088 as a pre-condition to unsealing EMTS regional office.

“TAXES AND LEVIES INCLUDE SITE INSPECTION FEE, AVIATION CLEARANCE, HAWKING PERMIT, FUMIGATION, SEWAGE FEES, BUILDING PERMIT, REFUSE COLLECTION AND DISPOSAL, BUILDING FITNESS, SHOP RATE, CAPITATION FEE,ETC.”

Multiple taxation has remained a recurring challenge for telecom operators with the national regulator, Nigerian Communication Commission (NCC), warning that states, under Nigeria’s federal tax system, were impeding development in the sector.

ALTON, reacting to this development in a letter to the RIRS obtained by IT Edge News, noted that the RIRS sealing of the 9Mobile’s premises was carried out without a court order and without adherence to the due process of law and as such it is illegal.

The association in the letter signed by its Chairman, Mr. Gbenga Adebayo further stated that the act by the RIRS contravened government’s plan on improving Nigeria’s position on the global Ease of Doing Business index to encourage more foreign investment into the country, even as the agency has now portrayed the state as unfriendly for investment.

Nigeria’s telecoms sector has grown exponentially from a sparsely 100,000 initial in over a decade to active lines of 162 million active lines as at May, 2018. But issues such has over taxation and right of way (RoW) have continued to hamper growth.

Operators faced with over 38 taxes and levies

A worried ALTON has often complained that operators are faced multiple taxes and levies from over 38 different agencies and states’ governments. Some of the taxes and levies include site inspection fee, aviation clearance, hawking permit, fumigation, sewage fees, building permit, refuse collection and disposal, building fitness, shop rate, capitation fee, among others.

All these have connived to impact negatively on investment into the country.

Stakeholders have incessantly called that the taxes be reduced as it is done in other developed climes where tax holidays are even given to companies. But instead of the taxes reducing, they continue to multiply, mostly as a result of “states’ governments’ greed and ungainly naivety to the potential of telecoms services in a community,” said one angry operator in Lagos.

ALTON in its letter states: “Based on our findings, we wish to categorically reiterate that EMTS is not indebted to the Government of Rivers State and that the sealing of EMTS’ Premises is illegal, especially as it was carried out without a court order and without adherence to the due process of law.

“The conduct of the RIRS in this regard, apart from being a clear contravention of the law, goes against the efforts of Government at improving Nigeria’s position on the global Ease of Doing Business index, to encourage foreign investment. Also by applying self-help remedies especially in a situation where the claim is erroneous, the RIRS has portrayed the State in very bad light as unfriendly and not welcoming of investors.

“EMTS has suffered incalculable financial loss as the sales outlet which is within the premises has remained closed, preventing it from serving its esteemed customers. EMTS has also suffered severe reputational damage from the bold display of the sealing order on EMTS premises, creating the perception that EMTS is a tax defaulter. EMTS employees have suffered untold hardship due to this wanton act, as its employees have been unable to resume at their duty posts for over two weeks.”

RIRS offends order protecting Critical National Infrastructure

ALTON has also drawn attention to the Office of the National Security Adviser (ONSA) directive that no government agency should seal any Base Transceiver Station (BTS) site as they are designated Critical National Infrastructure. The association said in this instance the directive has clearly been contravened by RIRS in sealing 9Mobile premises where a critical site is also situated, which has become inaccessible with the attendant security implications.

ALTON has appealed to the RIRS and the Rivers State Government to desist from any acts inimical to the normal operations of its members in the state and to unseal EMTS premises to enable the company carry out its operations.

The association is also insisting that RIRS honours the invitation to a reconciliation meeting, which the tax agency has turned severally.


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