Value Added Tax (VAT) paid by Nigerians who use telecommunications and other information and communications services was N412.31 billion in the previous year.
According to data from the National Bureau of Statistics (NBS), telecom businesses and other operators in the information and communications sector paid N466.5 billion in Company Income Tax (CIT) at this time.
Because of its importance to the economy, the telecom industry continues to rank among the biggest payers of taxes to the government. The sector contributed 19.29 percent, 21.19 percent, 19.04 percent, and 10.02 percent in the first quarter, Q2, Q3, and Q4, respectively, according to data from the NBS.
One of the major contributors to CIT was the information and communications industry. During the initial three quarters of 2023, ICT made up 11.89 percent, 20.30 percent, and 11.86 percent of the total CIT paid.
The rise in VAT revenues is indicative of higher telecom service consumption; for example, data usage surged to 713,200 TB in December 2023 from 517,670 TB in January. The telecoms saw an increase in revenue as a result of their greater reliance on digital services. In 2023, MTN’s service revenue increased by 22.4 percent to N2.5 trillion, while Airtel’s revenue for the nine months that ended in December 2023 was $1.24 billion.
The NBS defines the information and communication sector as publishing, broadcasting, motion picture, sound recording, and music production, as well as telecommunications and information services.
About 80% of the ICT sector is made up of the telecom industry. One of the main drivers of the nation’s GDP and a significant source of tax income for the government is the ICT sector.
The NBS made the following comments regarding the effect of the information and communication sector—to which telecoms contributed 83.69 percent—on the nominal GDP of the nation: “The sector increased by 40.79 percent annually, which was larger than 2022’s 19.00 percent growth. In the fourth quarter of 2023, the technology and communications sector contributed 12.52 percent of the nominal GDP, which was higher than the 10.42 percent reported in the same period of 2022.”
One of the four mobile network carriers in the nation, MTN Nigeria, was identified by the Federal Inland Revenue Service (FIRS) as one of its top taxpayers in 2021.
According to a statement signed by the company secretary, Uto Ukpanah, MTN Nigeria paid N757.6 billion in taxes to all government agencies in 2021, including the FIRS, while the FIRS brought in N6.4 trillion in income.
“Specifically, MTN Nigeria paid a total of N618.7 billion in direct and indirect taxes to the FIRS in the 2021 tax year, representing approximately 13.5 percent of the total FIRS collection for the year.”
The federal government’s yearly net revenue from the telecommunications industry is expected to rise by 100% between 2023 and 2027, according to a recent statement made by Bosun Tijani, minister for communications, innovation, and digital economy.
