Nigeria plans cut in telecoms infrastructure tax

6 Aug 2014

The government of Nigeria plans to lower taxes on telecoms infrastructure, in a bid to encourage companies to increase spending on networks in the West African nation, Communications Technology Minister Omobola Johnson told Bloomberg. ‘For every naira that is spent on infrastructure, about 70% is spent on taxes. We’re going to bring that down to a much more reasonable level at 30% to 40%,’ she said in an interview. While Nigerian laws allow only the federal government to tax mobile phone companies, states and local authorities have found other ways to raise cash by heavily levying operators’ infrastructure, including towers and base stations, Johnson added. As well as multiple taxation, Nigerian operators face other challenges including the vandalism of network infrastructure, an unreliable power supply, and heightened instability and unrest in several parts of the country, with Islamist militant group Boko Haram targeting telecoms network sites. ‘There are parts of the northeast that no operator can go into even if they want to,’ Johnson noted, adding that companies require the support of security forces to carry out maintenance in some areas.

Home to over 127.2 million cellular users at the end of March 2014 (up by 9% from 116.9 million a year earlier), the Nigerian mobile market is the largest in Africa by subscribers, TeleGeography’s GlobalComms Database notes. South Africa-based MTN is the dominant operator with a 44.9% share of total cellular users in Q1 2014.