Nigeria’s indigenous telcos seek 5-year tax holiday

Indigenous telecommunications companies in Nigeria have appealed to the Federal Government to give them tax holidays of up to five years.

This, they said, would allow them to compete favourably with bigger players who had enjoyed the same benefits in the past.

The operators, who made the appeal at a virtual forum on the National Policy for Promotion of Indigenous Content in the Nigerian Telecommunications Sector, said local players in the telecom sectors deserve pioneer status incentives, which should include tax and duty waivers on their importations.

According to them, these incentives were enjoyed by the GSM operators when they newly got their licenses in 2001 and led to their rapid growth.

Speaking at the forum organised by Business Metrics, the Executive Director, Business Development at Broadbased Communications Ltd., Mr. Chidi Ibisi, said aside from tax waivers for the small players, the telecom sector was seriously in need of intervention from the government.

He said the sector needs a special fund like the Nigerian Content Intervention Fund (NCIF) supervised by the Bank of Industry. “We need a similar Fund as NCIF with a seven per cent interest rate, 10-15 year loans, and equity participation,” he said.

Corroborating Ibisi at the forum, the Chief Executive Officer of Swift Telephone Network, Mr. Oluwole Adetuyi, said for the indigenous operators to grow, the sector would require access to funding for telecoms from financial institutions at low-interest rates.

“We need easy access to FOREX at Central Bank of Nigeria (CBN) approved rate, and provision of special intervention funds for the telecoms sector by the CBN– as has applied to other sectors,” Adetuyi said.

He said tax waivers, as well as provision of grants and subsidies to telecoms operators, would help the small players grow.

Adetuyi also called for the reduction and harmonisation of Right-of-Way charges across states and local government areas.

In a keynote at the forum, the Executive Vice Chairman of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta, said the Commission has established the Nigeria Office for Developing the Indigenous Telecoms Sector (NODITS) as part of the implementation of the government’s local content policy in the telecoms sector.

According to him, the Office is saddled with the responsibility of implementation of the local content policy as well as the Executive Orders 003 and 005.

“With the constitution of the NODITS, the industry should expect new Guidelines and Regulations bothering on indigenous content, local manufacturing of telecom equipment, outsourcing of services, construction and lease of telecoms ducts, succession planning in the telecoms sector, corporate governance, corporate social responsibility, etc. as the need arises,” said Danbatta, who was ably represented by the Team Lead, NODITS, Engr. Babagana Digima.

The EVC added that the Commission has already constituted a standing licensing review committee that is currently examining all its licenses in an effort not only of modernizing it to reflect the current realities of technology and development but also to consolidate, bundle, or un-bundle individual licenses or even create new licenses.