5% excise tax: Telcos’ll soon die like NITEL — MTN CEO, Toriola warns

Chief Executive Officer, CEO of MTN, Mr Carl Toriola has warned that the latest attempt to reintroduce the 5% excise tax on telecom services will put the final nail on the activities of telecom operators in Nigeria, including MTN Nigeria.

The National Assembly recently proposed the introduction of a 5% excise duty on telecommunications, gaming, and betting services as part of a new effort to reform the nation’s tax system.

Although the proposal is included in the “Nigeria Tax Act,” former President, Mohammadu Buhari had exempted telecom from paying the tax. Buhari said it would exacerbate the suffering of Nigerians.

Subsequently, President Bola Tinubu, in an Executive Order, also suspended the tax immediately he assumed office.

However, the legislators said their current proposal is aimed at overhauling existing tax legislation and consolidating various tax frameworks across the country.

Something drastic can happen — Toriola, MTN boss

However, Toriola said that the legislators, who are pushing for the tax regime on telecom, are playing with fire, because the Act will be forcing the telcos to go the way of Nigeria’s former national carrier, NITEL.

He reiterated his earlier position that the telecom sector is currently in the Intensive Care Unit, ICU, and may die off at any moment.

He said the telcos existing at the moment are only spending their reserves which will run out sooner than later.

Toriola said this while responding to questions when Cohort 3 of the MTN Media Innovation Programme, MTN-MIP, Fellows paid him a courtesy visit in his office in Ikoyi.

“Make no mistake about it, there is no way you’ll treat a sector that is adding over 15 percent to the GDP the way the telecom sector is being treated in Nigeria.

“Some fundamentals have to change or something drastic will happen. MTN and the entire industry are in a dire situation.

“We are all making losses because of the naira devaluation. There should be no delusion. If the tariff doesn’t go up, we will shut down.

“Already, we are regressing the way of NITEL and it is a matter of time; the country could be without any telecom operator,” he said.

… on USSD

Toriola also used the opportunity to clear the air on the rumor that the banks have been gradually making payments to the telcos to deplete the huge Unstructured Supplementary Service Data, USSD, debt that has pitted both the telecom and banking sectors against each other for a couple of years now.

According to him, against the rumor that banks are making payments, the debt has even surged above N250 billion.

He, however, said that regulators of both sectors, the Nigerian Communications Commission, NCC, and the Central Bank of Nigeria, CBN, are constantly meeting to see a lasting solution.

He noted that it is only when the efforts of the regulators fail that the telcos will seek approval from the NCC to withdraw their services to the banks.