Taxes are statutory. Therefore, they must be clearly traceable to an enacted law to be valid. In other words, you should have a good knowledge of taxes applicable in Nigeria.
Being a corporate body, there are general taxes applicable to telecoms in Nigeria. There are also sector specific taxes that peculiarly apply to telecoms.
This short post focuses on taxes which are specific and also generally applicable to telecom companies in Nigeria.
Let’s see them as highlighted below.
List of Taxes Applicable To Telecoms In Nigeria
Below is the list of taxes applicable to telecoms in Nigeria.
1. Company Income Tax (CIT)
All companies incorporated in Nigeria are liable to pay the Company Income Tax, as imposed by the Finance Act. Telecoms having gross turnovers of 100 million and above are liable to a thirty percent tax rate, while those with turnovers of above 25 million but less than 100 million are subject to a twenty percent tax. Telecoms making less than 25 million in gross turnovers are totally exempt.
2. Education Tax
Companies registered with CAC are subject to a two percent tax of their assessable profits.
This is payable within sixty days of service of assessment notice by FIRS.
3. Capital Gains Tax
Tax is imposed on all gains derived from disposal of chargeable assets. This is a ten percent
tax rate which all registered companies must pay to the FIRS.
4. National Cyber Security Fund
All GSM service providers, Internet service providers as well as telecoms are liable to pay
this tax at 0.005 percent of all electronic transactions undertaken by them. Also, the office of the National Security Adviser is required to keep proper records of the fund
moneys.
5. Annual Operating Levy (AOL)
This is paid annually by all holders of NCC issued individual licenses. It is also charged at 2.5 percent of net revenue, and 1 percent of net revenue for network operators and non-network operators respectively.
6. NITDF Levy
All internet service providers, telecoms as well as other companies provided in the NITDA, and having turnovers of 100 million Naira or above are liable to pay 1 percent tax on their yearly profits. Interestingly however, NITDF taxes are deductible for income tax purposes.
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References
1. List Of Taxes In Nigeria, https://pml.com.ng/list-of-taxes-in-nigeria/ accessed on Feb 10
2023
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