Nigeria plans to reduce taxes on telecommunications infrastructure to encourage companies to spend more on networks in Africa’s most populous country, Communications Technology Minister Omobola Johnson said. “For every naira that is spent on infrastructure, about 70 percent of it is spent on taxes,” she said in an interview at her office in the capital, Abuja. “We’re going to bring that down to a much more reasonable level at 30 to 40 percent.” Mobile-phone companies including Johannesburg-based MTN Group Ltd. (MTN) and Bharti Airtel Ltd. (BHARTI) of India have examined ways to offload networks to reduce exposure to costly African infrastructure. Apart from taxes, Nigeria operators also face the challenges of unreliable power supply and the threat of bomb attacks from Islamist militants.
[eap_ad_1] MTN, the Nigerian market leader, and Airtel were both fined earlier this year for poor service standards in the West African country. While Nigerian laws allow only the federal government to tax mobile-phone companies, states and local authorities have found other ways to raise cash by heavily levying operators’ infrastructure, including towers and base stations, Johnson said. Regional governments shouldn’t charge a retail store 10 million naira ($60,808) and phone companies 100 million naira for the same-sized space, she said. MTN, Africa’s largest phone operator, is planning to sell a stake in its Nigerian mobile tower network, which it values at more than $1 billion. Sunil Mittal, the billionaire chairman of India’s largest mobile-phone operator Airtel, said in a May interview that operators are unfairly taxed in Nigeria because the industry supports other areas of the economy. Nigeria is a target for international phone companies eager to tap into demand from the country’s 170 million people.
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