POLITICAL ECONOMY

NCC, FIRS Ink MoU For Ascertaining VAT Components Of Telcos’ Transactions

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…To Keep Multiple Taxation Southwards

By Angeline Ngbele, Correspondent, Abuja

Keen at bolstering cooperation between it and sister agencies, telecommunications sector regulator, the Nigerian Communications Commission (NCC), has penned a Memorandum of Understanding (MoU) with the Federal Inland Revenue Service (FIRS) to ensure the tax agency ascertains accuracy and completeness of value added tax (VAT) elements and other taxes payable in the transactions of telecoms operators.

A statement from the telecoms umpire inked by its Director of Public Affairs(DPA), Dr. Henry Nkemadu says, with the MoU, the FIRS will be able to integrate an application programming interface (API) technology solution with the systems of telecom Operators for independent verification of the amount of value added tax( VAT) that should be paid by mobile network operators (MNOs) rather than relying entirely on the Operators’ books of accounts.

Speaking during the MoU signing ceremony in Abuja on Tuesday, according to the statement from Dr. Nkemadu, the Executive Vice Chairman and Chief Executive Officer (EVC/CEO) at the NCC, Prof. Umar Danbatta, said that diligence and appropriate due processes were undertaken to conclude the MoU, as the Commission took its time to understand the import of the MoU.

According to Prof. Danbatta: “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, therefore, assured telecoms consumers and stakeholders that the integration of FIRS solution with the Operators’ systems was entirely to ascertain the accuracy of the VAT elements being paid by the Operators on their transactions and would not, in any way, degrade the quality of service delivery or lead to high cost of service to the consumers.

On his part, the Executive Chairman and Chief Executive Officer, FIRS, Muhammad Nami, thanked the NCC for accepting to collaborate with the tax agency, and said the MoU was 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.

Said Nami: “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.”

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