The Nigerian Communications Commission (NCC) has signed a Memorandum of Understanding (MoU) with the Federal Inland Revenue Service (FIRS)
This agreement is to ensure that the tax agency ascertains the accuracy and completeness of the value added tax (VAT) elements and other taxes payable in telecoms operators’ transactions.
With the MoU, the FIRS will be able to integrate an application programming interface (API) technology solution with telecom operator systems to independently verify the amount of VAT to be paid by mobile network operators (MNO), rather than relying entirely on the account books of the operators.
NCC’s executive vice chairman, Prof Umar Danbatta, said diligence and proper due processes had been undertaken to conclude the MoU, as the Commission took its time to understand the MoU’s import.
According to him, “Our concern, as Regulator of the telecoms industry, is that we needed to be sure that it is not another way to tax telecoms operators, who are already dealing with multiple taxation issues. We have also ensured that the integration of the solutions with telcos’ transactions systems will not, in any way, impact the cost and quality of service delivery by the operators to telecoms consumers.”
Danbatta assured telecoms consumers and stakeholders that the integration of the FIRS solution with the operators’ systems is entirely intended to determine the accuracy of the VAT elements paid by the operators in their transactions and will not in any way degrade the quality of service delivery or result in high service costs for consumers.
The executive chairman and CEO, FIRS, Muhammad Nami, who thanked the NCC for accepting to collaborate with the tax agency, said the MoU is mainly to ascertain completeness of tax transactions of mobile service providers to the federal government due to the shift of physical businesses to electronic-based business activities.
“The API, which was developed in-house, is transaction-based and all we are trying to do is to ensure we have the basis for determining the completeness and accuracy of VAT elements in telecoms transactions,” he said.
