The Nigerian Communications Commission (NCC) has signed a Memorandum of Understanding (MoU) with the Federal Inland Revenue Service (FIRS) to ensure the tax agency ascertain accuracy and completeness of value added tax (VAT) elements and other taxes payable in the transactions of telecoms operators.
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 VAT that should be paid by mobile network operators (MNO) rather than relying entirely on the Operators’ books of accounts.
The Executive Vice Chairman of NCC, Prof. Umar Danbatta, who signed the MOU with the FIRS said that diligence and appropriate due processes were undertaken to conclude the MoU, adding that it took its time to understand the import of the MoU.
“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 said.
He Danbatta assured telecoms consumers and stakeholders that the integration of FIRS solution with the Operators’ systems is entirely to ascertain the accuracy of the VAT elements being paid by the Operators on their transactions and will not, in any way, degrade the quality of service delivery or lead to high cost of service to the consumers.
Executive Chairman and Chief Executive Officer, FIRS, Mr. Muhammad Nami, thanked the NCC for accepting to collaborate with the tax agency, saying 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.
He said: “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.”