MULTIPLE TAXATION, LEVIES AS ILL WIND

     Sonny Aragba-Akpore writes that arbitrary taxes are crippling telecom services

Indiscriminate shutting down of mobile network operators sites by states and local government officials in pursuit of Internally Generated Revenue (IGR) is now the latest nightmare for telecom services in Nigeria and this is not helpful to anybody.

> The scenario leads to poor and unavailable services for everyone including those in quest for IGR.

> Strangely, some of these officials allegedly visit telecom sites with dubious proofs that the operators were indebted to the government for xyz months or years. These taxes are alien to everyone but the officials insist they must be paid or else services will be disrupted.

 This has been going on for several years and because not many people are aware of this crisis, we all blame the operators and the regulator for poor services.

 As things are now, the umbrella body for telecommunications operators, the Association of Licensed Telecom Operators of Nigeria (ALTON) has raised the alarm that if this situation persists, they may have no choice but shut down switches in 11 states and the Federal Capital Territory (FCT). The FCT has denied operators permit to build new base stations for nearly seven years and it carries on as if nothing has happened.

> While we await government’s intervention in this regard,

”ALTON says if these threats by state and local governments are not addressed quickly, millions of telephone subscribers may be cut off from their various networks.”

 The operators have said they can no longer cope with the humiliation they suffer in the hands of state and local governments officials who always come their ways brandishing tickets of taxes these officials claim are imposed on operators as Right of Way (RoW) charges among others.

 These local and state governments officials brandish dubious claims , irrespective of the National Executive Council (NEC) Resolutions on Multiple Taxation, Levies and Charges on ICT infrastructure in Nigeria of March 21, 2013.

 Part of the resolution by NEC is that the Federal Ministry of Works shall supervise RoW matters including that: Standardized and simplified RoW application process in all states of the federation, should be managed by a centralized and accessible agency or states Ministry of Works; Standardized fiber duct building specification across all states, for example, not less than four ducts for every single fiber duct infrastructure to be built following the approval of the Row application; Operation of 30 days lead time for approval of application Once relevant application terms are met including the submission of relevant application documents and payment of marginal application fees; Administrative charge of N145 per meter Row fees for every new build and N20 per meter yearly recurring fee for existing duct , with five years fee review process; Conferment of alienation right on duct owners with the obligation to seek and obtain the consent of the state at a standard flat fee of 5% off the build cost for each subsequent user; NEC listed the guidelines to be followed to include: That right of way on a federal highway is a public resource controlled by the federal government through the federal ministry of works and as a result, right of way is granted to the grantee for public benefit and may not be used contrary to public policy or for any purpose that shall be harmful to the good of the general public ;

That the principle of infrastructure sharing is mandated in the grant of these rights of way to reduce incidents of multiple excavations on the federal highways which increase the likelihood of damage to other highway infrastructure; That grantees shall therefore operate the rights of way on an open Access basis and for the sole purpose of laying and operating communications cables for ICT transmission services; That the contravention of any federal law, policy or these guidelines in the use of these rights of way are expressly prohibited and may lead to a fine, suspension or revocation of the right of way; That in the use of right of way to lay communications cables all effort shall be made by a grantee to ensure that there is minimal damage to other existing highway infrastructure and other infrastructure of other holders of rights of way; That the grantee shall be liable for any damage caused by it or its agents or independent contractors engaged by them without prejudice to the right of the ministry and the holders of rights of way to  hold such agents and independent contractors jointly liable. The grantee shall immediately ensure that any damage is immediately and satisfactorily remedied; The right of way on a federal highway is hereby defined to include all infrastructure deployed prior or pursuant to the use of the right of way and may not be alienated without the prior written consent of the minister first hand, which consent shall not be given to a person who already holds a similar right of way along a given route , except he just surrenders the initial right of way granted to him on that route.

>> The NEC resolution was reached after a 14-member committee made up of six governors, the FCT minister, acting chairman of FIRS, EVC of the NCC, four representatives of telecom operators and secretary to the population commission.

 No new document has been released since then. Some former Governors who were members of the committee that midwifed the document are now law makers yet the crisis continues.

 Poor Telecom services can no longer be blamed for the operators and the regulator alone but also for state and local governments officials as well.

>>> The ALTON) says its concern about the shutting down of telecommunications facilities in Kogi State as a result of disputes arising from unusual taxes and levies demanded by the Kogi State Government through Its Kogi State Internal Revenue Service (KIRS) is one of the reasons for the latest alarm.

 “This issue is likely to lead to a total communications blackout in the entire Kogi State, parts of Abuja, the Federal Capital Territory and possible impact on service availability in some parts of the following States: Nasarawa, Benue, Enugu, Anambra, Edo, Ondo, Ekiti, Kwara, Niger States. These are States sharing borders with Kogi State” ALTON Chairman, Gbenga Adebayo explained adding that

a number of critical telecommunications sites belonging to our members have been closed and sealed up by some State Governments in an attempt to increase their Internally Generated Revenue Collection.”

>>> “This action followed an ex-parte court order obtained by the Kogi Internal Revenue Service over unsubstantiated allegations that our members are in default of tax payments to the state government (which is not the truth) and access to these critical telecom sites has been denied.” Adebayo said, “as a result of these actions by the state government, our members are unable to refuel power generators in these sites, a situation which has led to outage of over 70 sites including hub sites across parts of Kogi State. Now, with likely impact on Nine States surrounding Kogi, we are very concerned that this indiscriminate action has the potential of further leading to a total telecommunications outage.”

 “To the best of our knowledge, our members have settled all statutory levies and taxes due to the Kogi State Government and have taken necessary steps to comply with local laws that govern business activities within the various States.”

>>>

>>> The charges imposed on operators include but not limited to:

>>> ..Annual Right of Way (ROW) renewal fees; Social Services contribution; Employee Economic Development Levy,; Mast site premises renewal; Fire service yearly renewal.

 Others are from the States Environmental Protection Board on:

Payment of environmental levy; Failure to submit an environmental impact assessment report; Failure to register industry;

Failure to submit environmental audit report every two years; Storage of petroleum products and radioactive materials without written permission from the environmental board; Failure to comply with setbacks to roads, power lines and rivers/streams; and

Dumping of toxic or hazardous substances or hazardous substances or harmful waste without KSEPB approval.

ALTON is worried that the action by these local and state officials “will jeopardize communication services provided by us to security agencies such as the Nigeria Police Force, the Armed Forces in addition and to other emergency and social services in the states and this will include affecting communication links to Bank automatic teller machines (ATM) across those states.

The outage currently being experienced is already affecting the ability of ALTON members to provide uninterrupted service delivery to Commercial Banks, Central Bank of Nigeria, the Nigerian National Petroleum Corporation and other critical agencies of government in the aforementioned locations. Adebayo further said

 that the office of the National Security Adviser to Mr. President had in the past communicated to the 36 state governments on the fact that telecommunications sites are Critical National Infrastructure (CNI). They are critical socio-economic and security infrastructure. The agency had strongly advised against sealing them as such actions would have negative implications on national security.

State governments were encouraged to explore other means of resolving tax related disputes rather than sealing telecommunications sites. It is therefore worrisome that the states continue to ignore such advice.

 ALTON members have also made several overtures to State Internal Revenue Service in the past months in a bid to resolve the disputed issues amicably but the agencies have remained adamant. Rather than resort to the Tax Arbitration Tribunal for intervention as is expected of a government agency, some have resorted to subtle intimidation by getting the sites shutdown in a bid to coerce ALTON members into accepting the illegal taxes and levies.

 Adebayo lamented that “as an industry, this situation is very worrisome and of great concern and we hereby call on the President, the Vice President, who is driving the Presidential Enabling Business Council on Ease of doing business in Nigeria to prevail on the State governments to thread with caution in this regard.”

Aragba-Akpore is a member of THISDAY Editorial Board