Telecom
Step Down 9% Service Tax Bill, Telecoms Industry Overtaxed- ATCON
The Association of Telecommunications Companies of Nigeria (ATCON) has commended the Lagos Chamber of Commerce & Industry’s (LCCI) dialogue session on the Proposed 9% Communication Services Tax Bill, adding that the industry is strictly against the moves by the Federal Government.
Olusola Teniola, President of the Association, said that they were happy to identify with the strategic initiative by LCCI to protect investments made in the telecom industry from undue pressure from the government in the form of yet additional burden on the members that are already overtaxed by all tiers of government through AOL, VAT, RoW (s), Levy permits, duties etc.
Teniola who was speaking at the event on Wednesday said that the growth of Information and Communication Technology during the last few years has been phenomenal and tremendous with positive impact on every aspect of human life, adding that the industry which is heavily taxed already would prefer the Bill is stepped down.
“There is no doubt that the emergence and liberalization of this sector has also impacted positively on revenue accruable to government , employment generation (both Direct and Indirect), Foreign Direct Investment (in tens of billions of dollars) and a host of other positives which time would not permit me to mention”.
Proposed Tax & ATCON Position
He said that ATCOn recognizes that, generally, taxation is one of the many ways through which governments all over the world generate income to be able to discharge their duties to the citizens.
“Government at all levels make collections of taxes mandatory through enactment of policies. The contributions of the Communications sector was meagre some fifteen years ago but through the concerted efforts of some patriotic and dedicated experts in the telecommunications sector under the aegis of the Association of Telecommunications Companies of Nigeria who advocated for the liberalization of the sector, the sector is now contributing revenue of well over 8% to the nation’s GDP.
“ATCON believes any calculated actions that have potentials to stifle further contribution of the telecoms industry to our GDP must be avoided by all tiers of government in Nigeria as the perceived benefits of imposing a Communication Service tax on telecoms subscribers has the potential to erode if not destroy the achievements that have been made since the telecoms sector was liberated. We therefore advise both the House of Representatives and the Senate (the Legislative arm of government) to discontinue with the bill.
ATCON’s Reasons
“Decrease in the Inflow of FDI to the Sector: The general rule of investment or principle of investment is that institutional Investors will take their investible funds to countries where the tax rate is low or lowest. As we all know that Nigerian telecoms subscribers are already paying tax because VAT is embedded in calls made and data consumed”.
He warned that if the bill sails through it would reduce the subscribers’ consumption of data and reduce length of a voice call, this will result in drop in revenue that would accrue to telecoms operators which will in turn reduce the contribution of the sector to our GDP.
“The Return on Investment (ROI) would be badly affected as a result of the above illustrations. Nigeria as a nation needs a lot of investible funds to build infrastructural facilities and provide employment for her teeming population and especially our growing youth. As we know that Nigeria’ telecom industry still needs circa 50,000 base stations to be able to improve on Quality of Service and to reach the unserved and underserved parts of the nation.
“ATCON’s position is that whatever we are doing as a nation must not be done to deter investors from staking their hard earned money on the Nigerian telecommunications businesses, in other words, our policies must continue to be investment friendly. It has been established that revenue from voice is still significant and it must be stressed here that the investment that is required to deepen the penetration of Broadband in Nigeria is much greater than the one we used to provide voice telephony. In view of this, the said Communications”.
According to Teniola, the Service Tax bill should be stepped down so as to encourage investors and make the sector more attractive for foreign direct investors.
He said that ATCON is working with other relevant agencies to increase the Foreign Direct Investment to the sector which is highly capital intensive, hence this cannot be achieved if the government is considering introducing Communications Services Tax, which will deter further investments to be made.
Loss/Erosion of Innovation and Creativity
“ATCON considers the proposed Communications Services Tax bill unnecessary and prohibitive because the operators in the sectors are already faced with multiplicity of taxation. Imposition of Communications Services Tax bill could stifle innovation and creativity in the sector and this would automatically reverse the gains already made in the past decade. This might lead to increase in unemployment, decrease in revenue accruable to government which would heighten the county’s poverty level.
Telecoms Services Unavailability in Some States
“Governments at all levels have at one time or the other have expressed the need to gear up the use of ICT to grow and develop their various constituencies. The application of the proposed Communications Services Tax would definitely be a clog in the wheel of roll out of broadband services for the development of the nation-Nigeria. It means that telecommunications services would not be available in some state of the federation.
Speeds-up Chronic Recession
“The high taxation takes so much away from both the telecoms operators and subscribers that little or nothing is left to run the business. If government tries to boost the economy with increased government spending, the result is stagflation (simultaneous high inflation and unemployment) instead of prosperity. The only cure for stagflation is to cut both taxes and government spending.
“ATCON believes any action that has the potential to derail the telecoms industry should be avoided by all tiers of government in Nigeria as the benefits of imposing a Communication Service Tax on telecoms subscribers are far lower than the revenue that it is going to create for the government. In view of this and other reasons enumerated above, the Association’s position is that the proposed Communications Service Tax bill should be stepped down.
Telecommunications operators have called on the Federal Competition and Consumer Protection Commission (FCCPC) and the Nigerian Communications Commission (NCC) to establish a clear regulatory framework for airtime and data credit services, warning that millions of Nigerians could face fresh disruptions if the agencies fail to coordinate their responsibilities.
Gbenga Adebayo, chairman, ALTON
This is coming on the heels of the Federal High Court judgment affirming the FCCPC’s authority to regulate consumer protection in the airtime and data credit market while preserving the NCC’s exclusive mandate over telecommunications licensing and technical regulation.
The ruling effectively clarified that both regulators have complementary roles rather than overlapping powers.
Association of Licensed Telecommunications Operators of Nigeria (ALTON), said the judgment should serve as the basis for stronger collaboration between the two regulators to avoid the regulatory uncertainty that earlier forced operators to suspend airtime and data credit services.
Gbenga Adebayo, chairman, ALTON, said the industry was not disputing the authority of either regulator but was seeking a clearly defined operational framework before any further regulatory actions are taken.
“The court has done something important. It has confirmed the FCCPC’s authority and, in the same breath, affirmed that the NCC’s role is preserved. Concurrency means coexistence. The industry now expects both regulators to establish the coordination framework that the court’s reasoning requires,” Adebayo said.
He stressed that regulatory certainty had become critical because millions of Nigerians depend on airtime and data credit services for daily communication.
“Forty million Nigerians depend on these services. The court has made clear that both regulators have a role. The industry is asking them to define how that works before any action that could disrupt access again,” he stated.
Adebayo also urged both agencies to engage industry stakeholders before introducing measures capable of affecting consumer access to the services.
According to him, the Presidential Enabling Business Environment Council (PEBEC) directive requiring Regulatory Impact Assessments before major policy changes should be observed to minimise unintended consequences on businesses and consumers.
The renewed call comes months after major mobile network operators temporarily suspended airtime and data borrowing services following the implementation of the FCCPC’s Digital, Electronic, Online and Non-Traditional Consumer Lending (DEON) Regulations, a development that affected millions of subscribers nationwide.
In its judgment, the Federal High Court held that while the FCCPC has powers over competition and consumer protection issues in the digital lending ecosystem, it cannot assume the NCC’s statutory responsibility for licensing telecommunications operators.
Justice Ambrose Lewis-Allagoa ruled that the two agencies must operate within their respective mandates, describing their relationship as one of “coexistence, not displacement.”
MTN Nigeria has warned customers to disregard fraudulent online posts claiming the telecom operator is offering “1 Month Free Data for Old Subscribers,” describing the promotion as fake and unauthorised.
In a statement shared on its X handle, the telco said the circulating promotion is not from MTN and is not affiliated with the company.
MTN urged customers not to click on the accompanying link in the online post or provide their phone numbers or personal information on any third-party website.
Customers are advised not to click on the link or provide their phone numbers or personal information on any third-party website.
“We will never require customers to submit their details on external platforms to claim data or any other reward,” MTN said.
The company added that all genuine promotions, products and services are announced only through its official communication channels.
“All authentic MTN promotions, products and services are communicated exclusively through our official channels, including www.mtn.ng, our verified social media pages and *180#,” the company said.
MTN also urged customers to remain vigilant against online scams designed to steal personal information, warning that fraudulent offers often impersonate trusted brands to deceive unsuspecting users.
“Don’t be the next victim!” the company said, reiterating that the purported “1 Month Free Data for Old Subscribers” offer is fake and not associated with MTN Nigeria.
National Industrial Court of Nigeria (NICN), sitting in Ikoyi, Lagos, has dismissed a Notice of Preliminary Objection filed by Pan African Towers Ltd. (PAT) in an employment dispute instituted by its former Managing Director and Chief Executive Officer, Mr. Azeez Amida.
The court also awarded ₦500,000 in costs against the company after holding that the application lacked merit.
Justice Essien, who delivered the ruling on July 21 in Suit No. NICN/LA/143/2025: Mr. Azeez Amida v. Pan African Towers Limited, held that the substantive case concerning Amida’s alleged outstanding contractual entitlements under a Mutual Separation Agreement should proceed to hearing.
The ruling effectively rejected the company’s attempt to terminate the proceedings on jurisdictional grounds.
Jurisdictional Challenge Rejected
Pan African Towers had argued that the National Industrial Court lacked jurisdiction to entertain the matter because the Mutual Separation Agreement executed between the parties required disputes to first pass through negotiation, mediation and arbitration before litigation could be initiated.
The company maintained that Mr. Amida failed to exhaust those contractual dispute resolution mechanisms before approaching the court.
However, Justice Essien rejected the argument after examining evidence presented by the claimant showing that several attempts had been made to activate the agreed dispute resolution process before legal proceedings commenced.
According to the court, documentary evidence showed that Mr. Amida, through his solicitors, issued correspondence and formal demand letters aimed at resolving the dispute amicably in line with the terms of the agreement.
The court found that rather than engaging with those efforts, Pan African Towers failed to meaningfully participate in the process and later sought to rely on the same contractual provisions to challenge the court’s jurisdiction.
Evidence Considered by the Court
According to evidence presented by Mr. Amida’s legal team, the court considered correspondence involving senior officials of Pan African Towers and its investors.
Among the documents relied upon was a letter allegedly written by the Chairman of the Board of Pan African Towers and Partner at Development Partners International (DPI), Mr. Adefolarin Ogunsanya, rejecting the demand made by Mr. Amida’s legal representatives for an amicable resolution before litigation.
The claimant’s legal team also tendered multiple email communications allegedly sent from January 2025 to Verod Capital Management’s in-house legal counsel, Mr. Dipo Okuribido.
According to the claimant, those emails did not receive any response before the commencement of the suit.
Based on the evidence before it, the court held that the conduct of Pan African Towers was inconsistent with reliance on the contractual dispute resolution provisions.
Justice Essien ruled that the company had effectively waived its right to insist on arbitration after frustrating the preliminary dispute resolution process contemplated by the parties’ agreement.
The court consequently held that Pan African Towers could not rely on the arbitration clause to prevent the court from hearing the substantive claims.
Court Awards Costs
Having dismissed the Preliminary Objection, the National Industrial Court awarded costs of ₦500,000 against Pan African Towers.
The court described the objection as lacking merit.
Substantive Defence Yet to Be Filed
The ruling represents the first judicial determination in the employment dispute.
The claimant’s legal team noted that since the suit commenced, the principal response filed by Pan African Towers had been the Preliminary Objection challenging the jurisdiction of the National Industrial Court.
According to the claimant, the company has yet to file a substantive defence addressing the merits of the claims relating to the alleged outstanding contractual entitlements.
With the dismissal of the jurisdictional challenge, the matter will now proceed to hearing on its merits.
The court adjourned the substantive suit until Jan. 12, 2027.
Background to the Dispute
The dispute arose following Mr. Amida’s departure from Pan African Towers after both parties executed a Mutual Separation Agreement.
According to the claimant, while the agreement governed the terms of his exit from the company, certain contractual entitlements remained unpaid.
His legal representatives said they initially sought to resolve the dispute through the mechanisms provided under the agreement by engaging the company through correspondence and formal demand letters.
When those efforts failed to produce a resolution, they commenced proceedings before the National Industrial Court seeking payment of the outstanding contractual entitlements.
Rather than filing a substantive defence to the claims, Pan African Towers challenged the jurisdiction of the court, arguing that arbitration and other dispute resolution mechanisms had not been exhausted.
The National Industrial Court has now rejected that position.
Related Commercial Litigation
The employment proceedings are separate from ongoing commercial cases before the Federal High Court involving Mr. Amida, Development Partners International (DPI), Verod Capital Management and other parties.
Those proceedings relate to issues concerning the ownership of Pan African Towers and remain pending before the courts.
The National Industrial Court noted that those matters would be determined independently based on their respective facts, evidence and applicable legal principles.
Legal Team Reacts
Reacting to the ruling, representatives of Mr. Amida’s legal team welcomed the decision.
“The Court has affirmed an important principle of contractual dispute resolution.
“A party cannot frustrate the agreed process and later seek to rely on that same process to prevent a claim from being heard.
“We now look forward to presenting the substantive case before the Court,” the legal team said.
The lawyers acknowledged that Pan African Towers retained the right under Nigerian law to pursue any available appellate remedies but stated that they were fully prepared for the substantive hearing scheduled for January 2027.
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