Home Tech News NCC insists telcos must pay 2.5% annual levy to government

NCC insists telcos must pay 2.5% annual levy to government

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By Olubunmi Adeniyi

Lagos. April 29, 2013: The Nigerian Communications Commission (NCC) has insisted that the Annual Operating Levy (AOL) charged telecoms service providers will not be reviewed as it remains pegged at 2.5 per cent of their annual revenue.  

President Goodluck Jonathan
President Goodluck Jonathan

NCC stance comes in the wake of calls by operators for a review of the AOL in the wake of the changing telecoms operations landscape in the country.

The regulator says that 40 per cent of the AOL payments will go to the Universal Service Provision Fund (USPF) projects designed to extend services to rural and underserved areas of the country.

USPF is a special fund set up by the Federal Government under the National Communications Act 2003, designed to provide telecommunications and ICT services to unserved, underserved and deprived groups and communities in the country.

NCC made the clarification in a “Report of the Public Inquiry on Annual Operating Levy Regulations” published on its website.

Industry stakeholders want a revenue of the annual charge paid the regulatory agency but NCC is maintaining its stance that AOL will be charged on the yearly revenue of both network and non-network providers.

NCC says that it has come up with regulations to create and provide an effective and efficient administration of the regime which would specify the mode and methods of assessment of AOL.

NCC says that the draft Annual Operating Levy Regulations were published on its website for comments from the general public especially telecoms operators and other stakeholders.

The regulator says that it got six submissions came from service providers including MTN, Airtel Nigeria, Etisalat, Multi-Links, ipNX and Direct on PC.

While making a case for the reduction of AOL, operators note that over the years the industry has matured, the degree of regulatory intervention has declined and the industry has advanced.

They are expressing concern over the NCC’s stance that it will not reduce the 2.5 per cent charged as AOL. 

The service providers who participated in the public inquiry expressed concern over the huge interconnectivity debt that they must now contend with in their operations, adding that the regulator should reconsider the mode of computing the AOL charge especially as it concerns the use of gross income.

In response to this, the regulator says the operator must put in place its own debt recovery measures to ensure that their debts are paid.

On the provision for submission of financial statement to NCC, the operators raised that the statement should be amended to allow for flexibility at the Commission’s discretion.

NCC reacted to this by saying operators should comply with a 180 day period as stipulated by the regulations.

According to Eugene Juwah, Executive Vice Chairman, Nigerian Communications Commission, NCC, these regulations shall complement the Act and the respective licences issued by the commission and would also remove any ambiguity existing in respect of the AOL and other fees and charges to be paid by operators.

 

 

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