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    Blackfriars LLP
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    Nigerian Telecommunications Sector and the Tax Regime (Part 2) The report asserts that subscribers in Africa faced some of the highest tax rates in the world, just as the continent had also become a major expansion target for foreign companies. Telecommunications operators argue that high taxes are holding back mobile adoption in Africa, curbing economic growth and ironically, are actually lowering the total revenues collected by government. It is believed that African governments would earn an estimated $71 billion in tax revenues paid by mobile phone operators by 2012 if all mobile-specific taxes in sub-Saharan Africa are removed. It was also estimated that an additional 43 million people could get connected by 2012 leading to an increase of $930 million in tax. It would seem that looking at multiple taxation vis-à-vis growth in the industry, taxing mobile phones as a luxury is not appropriate and should be reassessed by the government because mobile phones boost GDP, creates jobs and are a vital part of the socio-economic landscape in sub-Saharan Africa, Nigeria inclusive. Perhaps, the better view is that governments that levy luxury taxes on mobile subscribers should through consultation with industry stakeholders and other experts consider the impact of lowering and removing mobile specific taxes. Beyond high taxation, multiple taxes paid by small and medium scale entrepreneurs, ICT and telecom operators inclusive, is a major obstacle retarding economic growth and deployment of ICT tools. It would be desirable for the various levels of government to rationalize the various taxes imposed at different levels of government. The government and allied institutions should initiate policies and create sound business environment that would promote the growth of Micro, Small and Medium Scale Enterprises (MSMEs) and reduce duties to make network installations, ICT tools and service rate cheaper for the consumer. While in other countries, the citizens get value for the taxes they pay which are expended on providing a conducive environment for the people, Nigeria remains a peculiar case where government collects taxes and the citizens do not get value for it. Government may also do well to consider tax holidays and concessions to telecommunications operators. Telecom investors who build factories for the local production of telecoms parts and accessories in Nigeria should receive significant tax holidays.

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    Nigerian Telecommunications Sector and the Tax Regime (Part 2) The report asserts that subscribers in Africa faced some of the highest tax rates in the world, just as the continent had also become a major expansion target for foreign companies. Telecommunications operators argue that high taxes are holding back mobile adoption in Africa, curbing economic growth and ironically, are actually lowering the total revenues collected by government. It is believed that African governments would earn an estimated $71 billion in tax revenues paid by mobile phone operators by 2012 if all mobile-specific taxes in sub-Saharan Africa are removed. It was also estimated that an additional 43 million people could get connected by 2012 leading to an increase of $930 million in tax. It would seem that looking at multiple taxation vis-à-vis growth in the industry, taxing mobile phones as a luxury is not appropriate and should be reassessed by the government because mobile phones boost GDP, creates jobs and are a vital part of the socio-economic landscape in sub-Saharan Africa, Nigeria inclusive. Perhaps, the better view is that governments that levy luxury taxes on mobile subscribers should through consultation with industry stakeholders and other experts consider the impact of lowering and removing mobile specific taxes. Beyond high taxation, multiple taxes paid by small and medium scale entrepreneurs, ICT and telecom operators inclusive, is a major obstacle retarding economic growth and deployment of ICT tools. It would be desirable for the various levels of government to rationalize the various taxes imposed at different levels of government. The government and allied institutions should initiate policies and create sound business environment that would promote the growth of Micro, Small and Medium Scale Enterprises (MSMEs) and reduce duties to make network installations, ICT tools and service rate cheaper for the consumer. While in other countries, the citizens get value for the taxes they pay which are expended on providing a conducive environment for the people, Nigeria remains a peculiar case where government collects taxes and the citizens do not get value for it. Government may also do well to consider tax holidays and concessions to telecommunications operators. Telecom investors who build factories for the local production of telecoms parts and accessories in Nigeria should receive significant tax holidays.

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    Nigerian Telecommunications and IT Newsletter

    Uploaded by

    Blackfriars LLP
    Nigerian Telecommunications Sector and the Tax Regime (Part 2) The report asserts that subscribers in Africa faced some of the highest tax rates in the world, just as the continent had also become a major expansion target for foreign companies. Telecommunications operators argue that high taxes are holding back mobile adoption in Africa, curbing economic growth and ironically, are actually lowering the total revenues collected by government. It is believed that African governments would earn an estimated $71 billion in tax revenues paid by mobile phone operators by 2012 if all mobile-specific taxes in sub-Saharan Africa are removed. It was also estimated that an additional 43 million people could get connected by 2012 leading to an increase of $930 million in tax. It would seem that looking at multiple taxation vis-à-vis growth in the industry, taxing mobile phones as a luxury is not appropriate and should be reassessed by the government because mobile phones boost GDP, creates jobs and are a vital part of the socio-economic landscape in sub-Saharan Africa, Nigeria inclusive. Perhaps, the better view is that governments that levy luxury taxes on mobile subscribers should through consultation with industry stakeholders and other experts consider the impact of lowering and removing mobile specific taxes. Beyond high taxation, multiple taxes paid by small and medium scale entrepreneurs, ICT and telecom operators inclusive, is a major obstacle retarding economic growth and deployment of ICT tools. It would be desirable for the various levels of government to rationalize the various taxes imposed at different levels of government. The government and allied institutions should initiate policies and create sound business environment that would promote the growth of Micro, Small and Medium Scale Enterprises (MSMEs) and reduce duties to make network installations, ICT tools and service rate cheaper for the consumer. While in other countries, the citizens get value for the taxes they pay which are expended on providing a conducive environment for the people, Nigeria remains a peculiar case where government collects taxes and the citizens do not get value for it. Government may also do well to consider tax holidays and concessions to telecommunications operators. Telecom investors who build factories for the local production of telecoms parts and accessories in Nigeria should receive significant tax holidays.

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    of 2

    WWW.BLACKFRIARS-LAW.

    COM
    and are a vital part of the socio-
    economic landscape in sub-Saharan
    Nigerian Telecommunications Africa, Nigeria inclusive. Perhaps, the
    Sector and the Tax Regime (Part better view is that governments that
    levy luxury taxes on mobile subscribers
    2)
    should through consultation with
    industry stakeholders and other experts
    March 2009 Vol.13 Issue # 3
    consider the impact of lowering and
    removing mobile specific taxes.
    The report asserts that subscribers in
    Africa faced some of the highest tax
    rates in the world, just as the continent
    Beyond high taxation, multiple taxes
    had also become a major expansion
    paid by small and medium scale
    target for foreign companies.
    entrepreneurs, ICT and telecom
    operators inclusive, is a major obstacle
    retarding economic growth and
    Telecommunications operators argue
    deployment of ICT tools. It would be
    that high taxes are holding back mobile
    desirable for the various levels of
    adoption in Africa, curbing economic
    government to rationalize the various
    growth and ironically, are actually
    taxes imposed at different levels of
    lowering the total revenues collected by
    government.
    government.

    It is believed that African governments


    The government and allied institutions
    would earn an estimated $71 billion in
    should initiate policies and create sound
    tax revenues paid by mobile phone
    business environment that would
    operators by 2012 if all mobile-specific
    promote the growth of Micro, Small and
    taxes in sub-Saharan Africa are
    Medium Scale Enterprises (MSMEs) and
    removed. It was also estimated that an
    reduce duties to make network
    additional 43 million people could get
    installations, ICT tools and service rate
    connected by 2012 leading to an increase
    cheaper for the consumer.
    of $930 million in tax.
    While in other countries, the citizens get
    value for the taxes they pay which are
    It would seem that looking at multiple
    expended on providing a conducive
    taxation vis-à-vis growth in the
    environment for the people, Nigeria
    industry, taxing mobile phones as a
    remains a peculiar case where
    luxury is not appropriate and should be
    government collects taxes and the
    reassessed by the government because
    mobile phones boost GDP, creates jobs

    ©Blackfriars LLP 2009. All rights reserved. This document is for general guidance only. Definitive advice
    should be sought from counsel if required. Blackfriars LLP is a Nigerian law firm with a representative
    office in Toronto, Canada.
    WWW.BLACKFRIARS-LAW.COM
    citizens do not get value for it.

    Government may also do well to


    consider tax holidays and concessions to
    telecommunications operators. Telecom
    investors who build factories for the
    local production of telecoms parts and
    accessories in Nigeria should receive
    significant tax holidays.

    For further inquiries, please contact:

    Ms. Nkeiru Onyeaso


    Tel: +234 808 718 0833
    Email: Nkay@blackfriars-law.com
    Fax: +1 646 536 8978

    Dr. Virtus Igbokwe


    Tel: +234 802 220 4755
    Email: Virtus@blackfriars-law.com
    Fax: +1 646 536 8978

    This newsletter has been sent to you by


    BLACKFRIARS LLP, a full-service law firm,
    in the genuine belief that its contents would
    be of interest to you. If you have received
    this newsletter incorrectly, or if you do not
    want to receive further information about
    legal developments in Nigeria and West
    Africa, please accept our apologies. To
    unsubscribe from future newsletters from
    BLACKFRIARS LLP please send an email to
    info@blackfriars-law.com with
    "unsubscribe" in the subject line.

    ©Blackfriars LLP 2009. All rights reserved. This document is for general guidance only. Definitive advice
    should be sought from counsel if required. Blackfriars LLP is a Nigerian law firm with a representative
    office in Toronto, Canada.

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