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GSMA calls for urgent telecom tax review in Nigeria

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GSMA urges Nigeria to reduce telecom taxes to encourage investment, boost the digital economy, and address burdens affecting infrastructure development.

 

The Global System for Mobile Communications Association (GSMA) has called on the Nigerian government to urgently reduce telecom taxes, highlighting that the current tax regime is hindering investment and slowing growth in the digital economy.

Angela Wamola, GSMA’s head of Sub-Saharan Africa, noted that Nigeria’s telecom sector is struggling due to high operational costs, including increasing energy prices and difficulties accessing foreign currency for importing essential equipment. These challenges have significantly strained telecom operators, limiting infrastructure expansion and the sector’s contribution to economic development.

Nigeria telecom tax review

 

According to Wamola, Nigeria’s burdensome tax regime creates additional obstacles not faced by other African markets. In 2023, Nigerian telecom companies paid approximately N2.4 trillion in taxes, contributing around N33 trillion to the country’s GDP, equivalent to 13.5% of the national economy.

However, the sector’s growth has slowed, partly due to the inconsistent application of the Right of Way (RoW) charges. Despite a 2020 agreement to set RoW fees at 145 naira per meter, many states charge higher rates, leading to escalated infrastructure deployment costs. Wamola explained that harmonising RoW charges could reduce fiber optic installation costs by 15%, encouraging further network investment.

The GSMA recommends that the Nigerian government streamline taxes, harmonise RoW fees, and reduce multiple levies to support telecom operators in expanding their services.

These reforms, Wamola argued, would benefit Nigeria’s economy by improving connectivity and increasing digital inclusion for millions of Nigerians.

 


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