ICT tax remittance rises 158.51% YoY
By Jeph Ajobaju, Chief Copy Editor
Information and communication technology (ICT) firms paid N131.97 billion tax in the third quarter of 2022 (Q3 2022), up 158.51 per cent year-on-year (YoY) from N51.05 billion in Q3 2021.
National Bureau of Statistics (NBS) Company Income Tax (CIT) data shows ICT was one of the highest sectoral taxpayers in the first nine months of 2022 (9M 2022), remitting N317.05 billion.
The treasury received N810.19 billion as CIT in Q3 2021, a 13.41 per cent hike above N714.40 billion in Q2 2021.
“In terms of sectoral contributions, the top three largest shares in Q3 2022 were manufacturing with 28.76 per cent; information and communication with 27.31 per cent; and financial and insurance with 8.81 per cent,” the NBS said.
MTN and Airtel were two of the top ICT taxpayers in 2021, according to the Federal Inland Revenue Service (FIRS).
“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,” MTN Company Secretary Uto Ukpanah said in a statement.
“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.”
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ICT firms laden with heavy taxation
Industry experts say telecoms is one of the most taxed sectors in the economy, as noted in a recent report by SBM Intelligence titled, ‘Taxing Nigeria’s subnational economies to oblivion’.
“At the federal level, telecommunications companies are expected to pay taxes such as Companies Income Tax, the Capital Gains Tax, Withholding Taxes, Stamp Duty, National Industrial Training Fund, Employees Compensation Scheme, the Tertiary Education Trust Fund, National Housing Fund contributions, Contributory Pension Schemes, and customs duties,” the report said, per reporting by The PUNCH.
“These taxes are applicable to all incorporated companies in Nigeria.
“There are also sector-specific taxes and levies such as the Annual Operating Levy paid to the Nigerian Communications Commission by all holders of licences issued by the regulator, the National Cybersecurity Fund, the National Information Technology Development Fund Levy and Right of Way charges.”
Communications and Digital Economy Minister Isa Pantami has disclosed telecom firms pay about 41 taxes across federal and state levels.
He warned “the ICT sector is being overburdened with so many categories of tax. If care is not taken, this is going to jeopardise the achievements and gains we have recorded so far in the sector.”
Association of Licensed Telecom Owners of Nigeria (ALTON) Chairman Gbenga Adebayo lamented “the 39 multiple taxes we already paying coupled with the epileptic power situation as we spend so much on diesel.”