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Consumers and firms operating in the information and communication space paid N706.44bn tax in the first nine months of 2023.
This is a 37.91 per cent increase from what they paid in the corresponding period of 2022, according to Company Income Tax and Value Added Tax data from the National Bureau of Statistics.
The IT industry, propelled by its telecoms subsector, continues to record high taxes, boosting the tax revenue of the country.
Consumption taxes for services like calls, SMS, data, and more, during the period under review, grew by 49.61 per cent year-on-year to N292.02bn as of the end of September from N195.18bn in the prior period of last year.
CIT from telecom firms grew by 30.71 per cent to N414.43bn in Q3 2023 from N317.05bn.
Commenting on the contribution of the sector to VAT, the NBS said, “In terms of sectoral contributions, the top three largest shares in Q3 2023 were manufacturing with 26.51 per cent; information and communication with 19.04 per cent; and financial & insurance activities with 12.31 per cent.
“In terms of sectoral contributions, the top three largest shares in Q3 2023 were information and communication with 26.18 per cent; manufacturing with 23.90 per cent; and mining and quarrying with 11.86 per cent.”
Led by the telecom subsector, the growth of the digital economy has led to increased revenue for the government.
According to MTN, it paid N757.6bn in taxes in 2021.
In a statement signed by the company’s secretary, Uto Ukpanah, the company claimed to have been responsible for 13.5 per cent of the total Federal Inland Revenue Service collection for the year.
It said, “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.”
Recently, the Minister for Communications, Innovation and Digital Economy, Dr Bosun Tijani, stated that he hoped to increase the annual net revenue of the telecommunications sector to the Federal Government by 100 per cent between 2023 and 2027.
However, telcos were clamouring for a reduction in their tax burden.
At a recent stakeholders’ event, the Chairman of the Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, noted that telcos paid 52 different taxes.
He said, “Today, we checked the number of taxes and levies that we face across the country, it is now 52. We are one of the highly taxed sectors of the economy. And it is not just these taxes that are the issue; it is the behaviour of public actors when collecting the taxes. These things have spiral effects on the things that we want to do.”
According to the Association of Telecommunications Companies of Nigeria, funding needed for network expansion is being redirected to the payment of illegal taxes.
The association highlighted that the telecom industry was faced with multiple regulations that had led to multiple taxation, ensuring that operators were paying taxes to the three tiers of government
