Telecom
9% Communication Tax: Soft Land for OTT To ‘Knife’ Telcos
The proposed nine per cent tax on communications services by the Federal Government has variously attracted more ‘nays’ than ‘ayes’ from different quarters. It is expected owing to the fact, if the Bill scales through, 145.4 million active telephone lines (users) as at June 2016, will be affected.
Specifically, the Communications Service Tax” (CST) is proposed to be a nine per cent charge for the use of the communication service (Section 4 of the Bill), where communication service refers to voice, SMS, MMS, data, and pay per view TV; with focus on internet affordability; i.e., data costs, it is obvious that the tax is to be borne by all consumers.
Barrister Adebayo Shittu, minister of Communications has at different fora, labouriously explained to who cares to know that the goal of the proposed CST is to improve revenue generation as stated in Explanatory Memorandum of the Bill; in fact, the target is pegged at somewhat N20billion (monthly). Well, government should consider other alternatives and not try to further harm an industry that is already bleeding.
On one hand, the National Assembly should reconsider the passage of the CST bill. However, if the tax must be introduced the government must consider a lower tax rate that enables it to achieve fiscal, for instance, revenue targets without undermining broadband affordability and access. Besides the fact that subscribers are going to bear the cost, telecommunication operators will definitely become more vulnerable, particularly now that Over-The-Top content (OTT) providers are already pushing their (telcos) revenue downward which will make an already bad situation worse ultimately leading to further job losses. So, the Bill is a sort of robbing Peter to pay Paul.
Many people have predicted that subscribers will bear the full blunt. True as that sounds, I align with the school of thought that OTT platforms will provide a leeway. Yes, instead of paying a set amount to send a message via the regular service providers- MTN, Glo, Etisalat, Airtel or NTel, smartphone users will cleave more to apps like WhatsApp, WeChat, Viber, Facebook, Twitter, IMO, etc., all of which boast large customer bases and offer innovative features like the ability to send pictures and videos, seamlessly. Telcos own the network, but companies like Google, Facebook can pull surprises on them, should they think of yanking off OTT services from their network. In other words, the nine percent communications service tax as proposed spells more doom for the operators.
Ajay Sunder, Frost and Sullivan analyst, said the shift is hitting markets all around the world.
“Definitely in the developed economies we’re already seeing a trend of declining SMS revenues. But even in emerging economies, like Indonesia, some of the operators are already seeing the impact of OTT apps on their voice and SMS revenue. With Thailand, for example, the minutes of usage of the top three voice providers actually declined close to 4 percent when Line was introduced in 2011.”
Recently, during a Fecebook conversation, Rev’ Sunday Folayan, president of NiRA, sarcastically stated and I want to believe with him that “A lot of people will move to OTT services and the providers will lose significant revenue. Many are not making 9% profit right now. They creatively cheat the end users. The proposed 9% Telecommunications tax in Nigeria is the confirmation of the transliterated Yoruba adage that says … The sheep, saw docility, before snatching the meat from the carnivore.
“Communication Companies in Nigeria cannot see the need for the proposed tax given the fact that the nascent industry should be cultured to enhance the country’s GDP right now, instead of milking it at infancy. Do not be blinded by the MTN Infraction”.
Nurudeen Sulieman nodded in agreement saying, “True talk. With all this 5GB data for 50 Naira Promo you hear every day, GSM operators are now operating like banks, they give sales target not just to the marketing staff, even the few technical staff they have left, as most of their infrastructure and switches have been passed over to a third party for operations and maintenance. ‘Kai’ ‘wetin this people they think self’, when NCC just announce that telephone operators have lost almost 50% of their subscribers.
“I understand the minister is so excited that his ministry will be generating 2 Billion Naira monthly from that tax…Apart from the fact that the target is not achievable because end user will drop by a margin unimaginable, whatever money they generate from the 9% tax will end up as social security stipend for a sizable workers that will be laid off by the same Telecom industry that are targeting. It will also be double jeopardy, because the normal tax will also drop due to low turnover by the operators. I beg make them think am well”.
Alliance for Affordable Internet (A4AI)-Nigeria Coalition in a document released recently, raised critical issues concerning compliance and how it will impact the telcos operations.
A4AI said, “Compliance and responsibility for collecting payments placed on mobile operators. Compliance is likely to add a number of operational costs to operators. For example, rather than annually, all service providers are to file tax returns and pay the tax due not later than the last working day of the month immediately after the month to which the payment relates. So while the 9% tax is to be paid by consumers, analysis points to the fact that they will likely become additional burdens placed on operators as their operational costs will further rise.
While the impacts of the CST on the sector as a whole are major, the above analysis shows the direct, possibly unintended, impact on the consumer and specifically those in low-income groups and women, hence balanced fiscal policy must consider affordability of mobile broadband and should not put in place additional barriers that make Internet access unaffordable for millions of Nigerians.
In the words of Ken Nwogbo, Publisher, Nigeria CommunicationsWeek, “Discontinue the Controversial ICT Tax Now” and I’d simply add I CONCUR!
CFA is the founder of www.techsmart.ng and co-producer/presenter of Tech Trends on Channels TV
National Information Technology Development Agency (NITDA) has reiterated the Federal Government’s commitment to leveraging innovation, digital skills, and emerging technologies to accelerate Nigeria’s transition into a globally competitive digital economy.
NITDA
This commitment was reaffirmed at the Port Harcourt Tech Expo 2026, held at the EUI Centre, Port Harcourt, Rivers State, where NITDA participated as a key stakeholder in discussions aimed at advancing technology-driven economic growth and innovation across Nigeria.
Dr. Kashifu Inuwa Abdullahi, CCIE, Director-General/Chief Executive Officer of NITDA, who is represented by the Director of Stakeholder Management and Partnerships, Dr. Aristotle Onumo, delivered the Opening Keynote Address at the two-day event themed “Syntropy: Collective Futures – Systems, Solutions, Synergy and Societies.”
Addressing policymakers, technology leaders, startup founders, investors, academics, development partners, and young innovators, Kashifu emphasized that the future of Nigeria’s prosperity would increasingly be determined by its ability to harness technology, innovation, and human capital rather than reliance on natural resources.
According to him, the global digital economy presents unprecedented opportunities for Africa and Nigeria to create jobs, attract investments, and improve productivity through emerging technologies such as Artificial Intelligence (AI), data analytics, cloud computing, cybersecurity, and digital platforms.
“The future is not something we inherit; it is something we build. Nigeria’s greatest resource is not oil but its people. Our ability to develop digital talent, foster innovation, and create enabling ecosystems will determine our competitiveness in the digital age,” he stated.
He noted that AI and digital technologies are rapidly transforming industries across the world and urged stakeholders to embrace innovation as a catalyst for economic diversification and sustainable development.
He further highlighted NITDA’s ongoing implementation of the Strategic Roadmap and Action Plan (SRAP 2.0), which focuses on digital literacy, emerging technologies, innovation, cybersecurity, digital infrastructure, and inclusive economic growth.
The keynote also underscored the need for stronger collaboration among government, industry, academia, development partners, and the startup ecosystem to unlock the immense potential of Nigeria’s youthful population.
The Port Harcourt Tech Expo brought together a broad spectrum of stakeholders to deliberate on issues relating to Artificial Intelligence, startup development, digital skills, innovation financing, technology adoption, entrepreneurship, and ecosystem growth.
Participants explored opportunities for positioning the Niger Delta as a major hub for technology, innovation, and digital entrepreneurship while discussing strategies for addressing challenges related to skills development, startup financing, infrastructure, and technology commercialization.
During the event, NITDA engaged with technology companies, startups, innovation hubs, academic institutions, and development partners on potential areas of collaboration aimed at advancing digital inclusion and innovation-led development.
The Agency also used the platform to amplify the several of its flagship initiatives, including the Digital Literacy for All (DL4ALL) programme, the National Centre for Artificial Intelligence and Robotics (NCAIR), and programmes under the Office for Nigerian Digital Innovation (ONDI).
Observers at the event commended NITDA’s leadership in driving Nigeria’s digital transformation agenda and noted the growing impact of the Agency’s interventions in supporting startups, promoting digital literacy, and strengthening the country’s innovation ecosystem.
The Expo concluded with a renewed commitment by stakeholders to deepen collaboration, support innovation, and create opportunities for young Nigerians to participate actively in the digital economy.
As Nigeria continues its digital transformation journey, NITDA reaffirmed its commitment to fostering partnerships, developing talent, enabling innovation, and creating a technology-driven economy that delivers sustainable prosperity for all citizens.
Mr Khalil Suleiman Halilu, executive vice chairman and chief executive officer of the National Agency for Science and Engineering Infrastructure (NASENI), has reaffirmed the Agency’s commitment to strengthening Nigeria’s healthcare sovereignty through local manufacturing of medical diagnostic technologies.
L-R: CEO/Co-Founder, NASENI-Troment Biotechnologies Limited, Dr. Selim Hani; Team Lead, Science of Defeating Malaria initiative, Professor Dyann F. Wirth; EVC/CEO of NASENI, Khalil Suleiman Halilu; and Dr. Sami Hani, Board Member, NASENI-Troment Biotecnnologies during the dinner organized for the delegates of the initiative in Abuja at the weekend.
Halilu made the remark while hosting participants of the Harvard University-led Science of Defeating Malaria programme at a closing dinner in Abuja at the weekend, following their visit to the NASENI-TROMENT Biotechnologies Factory, where they commended the facility’s role in advancing disease control and healthcare innovation in Africa.
The delegation, led by Professor Dyann F. Wirth of Harvard University and comprising about 85 global health professionals, scientists and policymakers, toured the state-of-the-art facility and described it as a significant step towards combating malaria and other infectious diseases across the continent.
Speaking at the dinner, Halilu noted that the commendation further validated the vision behind the NASENI-TROMENT Biotechnologies Factory, a strategic project initiated 18 months ago to reduce Nigeria’s dependence on imported diagnostic kits and strengthen local healthcare manufacturing capacity.
He explained that the facility is designed to produce up to 600 million diagnostic kits annually, enough to meet about 80 per cent of Nigeria’s diagnostic testing needs while creating opportunities for export to other African countries and global markets.
The factory manufactures rapid diagnostic tests (RDTs) and in-vitro diagnostic (IVD) products under the N-CheckUP brand for diseases and conditions including malaria, hepatitis B and C, HIV, typhoid, syphilis, COVID-19, pregnancy and blood glucose monitoring.
According to Halilu, the project aligns with NASENI’s broader mandate of deploying science, technology and innovation to address national challenges, create jobs and build industrial capacity.
He expressed appreciation to Professor Wirth and members of the Harvard delegation for their recognition of the progress made at the facility and reaffirmed NASENI’s commitment to developing innovative solutions that improve lives and position Nigeria as a leading healthcare manufacturing hub in Africa.
The Science of Defeating Malaria programme, which was held in Abuja from June 7 to 13, brought together global experts committed to advancing strategies for malaria elimination and strengthening public health systems worldwide.
National Information Technology Development Agency (NITDA) has entered into a strategic partnership with the Development Agenda for Western Nigeria (DAWN) Commission through the signing of a Memorandum of Understanding (MoU) aimed at accelerating digital literacy, innovation development, and economic growth across Southwest Nigeria.
Director General NITDA, Kashifu Inuwa CCIE, Director General DAWN Commission Dr Seye Oyeleye alongside representatives of both organisations, display signed copies of the Memorandum of Understanding (MoU) upon its signing at NITDA Headquarters, Abuja.
Speaking at the signing ceremony in Abuja, NITDA Director General, Kashifu Inuwa, described the agreement as a significant step toward leveraging human capital and fostering regional collaboration to drive sustainable national development.
He commended the Southwest region for its longstanding culture of cooperation, noting that collective action remains essential for national progress.
“The Southwest continues to inspire when it comes to collaboration because no one succeeds in isolation. Other regions can learn from this model of cooperation.
“For Nigeria to grow, we must understand our strengths at both the state and regional levels and build on them,” he said.
Inuwa emphasised that Nigeria’s greatest resource is its people, stressing that investments in digital skills, innovation, and technology are critical to creating prosperity and expanding economic opportunities.
According to him, the partnership will facilitate knowledge exchange, capacity building, and innovation-driven initiatives capable of empowering citizens to develop local solutions with national and global impact.
Highlighting NITDA’s ongoing efforts to deepen digital transformation nationwide, he said the Agency is scaling digital literacy programmes, supporting innovation hubs, and promoting technology development across the country.
He noted that innovation flourishes where talent, infrastructure, and supportive policies intersect, making it important for every region to identify and strengthen its comparative advantages.
“Lagos has already established itself as a fintech hub and the commercial centre of the country. Abuja is emerging as a GovTech cluster, while other regions can develop specialised ecosystems around manufacturing, commerce, and other sectors.
“Every region possesses unique strengths that can be transformed into thriving innovation clusters,” he stated.
The NITDA boss expressed optimism that the collaboration would accelerate the implementation of the Agency’s strategic initiatives throughout the Southwest.
He added that both organisations had already begun working together prior to the formalisation of the agreement and called for swift action following the signing.
“We are excited about this partnership and look forward to translating our shared vision into tangible outcomes. While engagements have already commenced, I would like to see even greater momentum after the signing of this MoU,” he added.
In his remarks, the Director General of the DAWN Commission, Seye Oyeleye, highlighted the importance of digital literacy in preparing citizens for future opportunities and ensuring meaningful participation in the digital economy.
He noted that the Commission, which coordinates development initiatives across Ekiti, Lagos, Ogun, Ondo, Osun, and Oyo States, views the partnership as a strategic vehicle for advancing Nigeria’s digital transformation agenda.
Oyeleye highlighted Nigeria’s target of equipping 100 million citizens with digital skills by 2030 through the Digital Literacy for All Initiative, stressing that the Southwest has a pivotal role to play in achieving the national objective.
“Nigeria has committed to equipping 100 million citizens with digital skills by 2030. Southwest Nigeria is not merely a contributor to that vision; it is central to its success,” he said.
He explained that the MoU formalises a shared commitment to ensuring the effective implementation of NITDA’s programmes, particularly the National Digital Literacy Framework, across the region.
He added that the Commission would leverage its extensive network and partnerships across the six Southwest states to bridge federal digital initiatives with local communities, institutions, and young people.
“We will work to ensure that NITDA’s frameworks are not only implemented but strengthened. Our reach across the Southwest positions us to connect federal digital infrastructure and programmes with communities and young people who require the skills needed to thrive in the digital economy,” he stated.
Oyeleye further assured NITDA of the Commission’s commitment to delivering measurable results throughout the five-year duration of the agreement, noting that the true value of development institutions lies in the impact they create rather than the agreements they sign.
The MoU reflects the shared determination of both organisations to advance digital literacy, strengthen innovation ecosystems, and create sustainable economic opportunities for citizens across Southwest Nigeria, further supporting the country’s journey toward a robust and inclusive digital economy.
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