Mr. Carl Toriola, Chief Executive Officer of MTN Nigeria, has issued a stark warning that the proposed reintroduction of a 5% excise tax on telecom services will severely impact the operations of telecom operators in Nigeria, including MTN.
The National Assembly has recently proposed this tax as part of a broader tax reform initiative targeting telecommunications, gaming, and betting services. However, the tax was previously exempted under the “Nigeria Tax Act” by former President Muhammadu Buhari, who cited concerns that it would further burden Nigerians. President Bola Tinubu also suspended the tax upon taking office through an Executive Order.
Toriola expressed his concerns, stating that lawmakers pushing for this tax are “playing with fire.” He likened the potential fallout to the fate of Nigeria’s former national carrier, NITEL, warning that the telecom sector is currently in an “Intensive Care Unit” and could collapse if conditions do not improve.
He emphasized that telecom companies are depleting their reserves, which are unlikely to last much longer, and reiterated that the sector, which contributes over 15% to Nigeria’s GDP, deserves better treatment. “Some fundamentals have to change, or something drastic will happen. We are all making losses due to naira devaluation,” he said, adding that without an increase in tariffs, the industry risks shutting down entirely.
Toriola also addressed the ongoing issue of unpaid Unstructured Supplementary Service Data (USSD) debts between telecoms and banks, revealing that the debt has surged beyond N250 billion. He noted that regulators from the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) are working to resolve the issue, but if efforts fail, telecoms may seek approval to withdraw their services to the banks.