By Kingsley I. Ilechukwu, Bureau Chief, South West, Nigeria
Following a palpable telecommunications services tariff increase, championed by telecoms companies, the National Executive Committee of the National Association of Telecoms Subscribers (NATCOMS), held an emergency meeting on the 31st December, 2024 on the planned tariff hike of Telecommunication Services and came up with a unanimous resolution totally objecting to the planned tariff hike.
NATCOMS’ objection was articulated in a Communique, available to Cyber Era NG, e-signed by its National President and National Secretary, respectively Chief Adeolu Ogunbanjo and Barr. Bayo Omotubora.
The Communique reads: “The Nigerian Communications Commission (NCC), as recently published in both the print and electronic media, gave an approval to the Telecommunication Service Operators to hike their tariffs and the approved increment would see the current tariffs rise by about 40 per cent.
This Association considers the decision of the NCC as very insensitive and not in the interest of Telecoms Services Consumers. The unrelenting rise in prices of Goods and Services in the Country has made life extremely difficult for the generality of Citizens who are the Consumers of Telecom Services. The new increment is therefore one additional burden too many.
“Under the new tariffs regime, a voice call will rise from N11.00 to N15.40 per minute, short message services will jump from N4.00 to N5.60 and
One GB data bundle will move from N1,000 to N1,400. This represents additional digital costs consumers will have to square up with at the beginning of a new year among other harsh economic realities of Nigeria of today. This, undoubtedly, is against Public Interest contrary to the false narrative of NCC that described the recent adjustments as pro public interest.
“This Association sees the increment as an official policy to price Telecoms Services out of the reach of generality of the Citizens of this country.
Telecoms Services are taxable services under the Value Added Tax Act. The Act was amended in 2019 by the Finance Act of that year to raise the tax rate from 5 per cent to 7.5 per cent which was 50 per cent increment and the increment has been borne by the consumers of rateable Telecom Services. That increment brought about untold hardship to our members many of who have been forced to cut back on their Telecommunication requirements.
“As if that was not bad enough, the Federal Government got the National Assembly to enact the Finance Act of 2020. Section 37 of the Act amended Section 21 of the Customs, Excise Tariff etc. (Consolidation) Act by imposing an excise duty charge on Telecommunication Services. The then president, President Muhammadu Buhari by an order prescribed 5 per cent as the rate of the excise duty charge, chargeable for Telecommunication Services. The additional tax burden was greeted with public outcry and this association, at the prompting of our members, challenged the excise duty charge in court, in the case of Registered Trustees of National Association of Telecommunications Subscribers (NATCOMS) V MTN Nigeria Communications Limited and Others – Suit No: FHC/L/ CS / 189) 2023 on the ground of double taxation which is illegal and unconstitutional. NCC and other Federal Bodies are parties to the suit and the Federal Government as represented by the Federal Inland Revenue Service (FIRS) “”entered an appearance and filed processes opposing the suit. The case is now pending before Hon. Justice Aluko, sitting at the Lagos Division of the Federal High Court, and the case is slated to come up in the court on the 13th March, 2025.
“The cumulative effect of the pending suit and the public outcry prompted the Federal Government to suspend the implementation of the excise duty charge but the charge is now part of the controversial Tax Reform Bills now pending before the National Assembly.
The Implication of the foregoing is this:
The new increment will now make Telecommunication Services more expensive by 40% in the New Year and if the controversial Tax Bills sail through, Telecommunication Services will now attract 12.5% tax rate and by then two third of Telecoms Services Subscribers would have been priced out of Telecoms Services market. This is a complete negation of the statutory duty of NCC to protect the interest of Telecom Services Consumers.
We are aware of the arguments of the Telecom Operators that there has not been any tariff increment in a decade, multiple levies slammed on them by different levels / Tiers of Government and the dollarization of the costs of their equipments. But if the truth be told, there are many other avenues through which the operators can generate funds to meet their rising operational costs without putting un bearable burden on their consumers.
The Nigerian Stock Exchange Market, for instance is a veritable avenue for the operators to raise funds to meets their costs requirements. The operators should bring part of the ownerships of their companies to their subscribers through public offers. The decision of some of the operators to keep their companies as a private – going concerns is against public interest and the consumers should not be made to bear the burden of such a decision.
We, therefore, call on the NCC to null the approval given for the tariff hike and advise the operators to embrace other options of generating funds for their operations.”
At its 2024 End of Year Gettogether, the Association of Licensed Telecommunications Companies of Nigeria (ALTON) through its Chairman, Engr. Gbenga Adebayo stated that the telecoms sector was under siege saying if tariff was not reviewed upwards, members would not be able to guarantee provisioning of telecoms services.
Telecommunications umpire, the Nigerian Communications Commission(NCC) has not made its position known on the issue, as at press time.
