Reduce telecom taxes to boost digital investments, operators tell FG

The Global System for Mobile Communications Association (GSMA) has called on the Federal Government to reduce telecom taxes to encourage investments and boost the country’s digital economy.

GSMA’s Head of Sub-Saharan Africa, Angela Wamola, said on Wednesday that Nigeria’s complex and burdensome tax regime is hindering the telecom sector’s ability to invest in infrastructure, expand services, and contribute to the country’s economic development.

Wamola noted that rising operational costs, driven by increasing energy prices, have placed considerable strain on telecom operators.

She explained that the situation is further exacerbated by the difficulty in accessing foreign currency, which is essential for importing equipment needed to expand and maintain network infrastructure.

“These challenges are not unique to Nigeria; many African markets face similar issues. However, Nigeria’s complex and burdensome tax regime presents additional, country-specific obstacles that severely limit the sector’s potential,” Wamola said.

According to her, the telecom sector has experienced a slowdown in growth and contribution to the country’s GDP in recent years, attributed to financial losses and deteriorating performance among telecom operators.

In 2023, telecommunications companies in Nigeria paid a total of approximately N2.4 trillion in taxes, which represents a significant contribution to the Nigerian economy, as the telecom sector generated around N33 trillion, accounting for 13.5 percent of the country’s Gross Domestic Product (GDP) during the year.