Some private companies are expected to cough out as high as N500million due to the revised annual dues structure introduced under the Financial Reporting Council (FRC) Amendment Act 2023.
To this end, the Association of Licensed Telecommunications Operators of Nigeria (ALTON) called for a reconsideration of the revised annual dues structure, warning of the heavy financial burden it places on private companies.
Under the new structure, non-quoted public interest companies are required to pay dues based on a percentage of their annual turnover, which could reach as high as N500 million for some firms. In contrast, publicly quoted companies with similar financial metrics face a maximum annual payment of N25 million.
Reacting on this development yesterday, the association’s chairman, Engr. Gbenga Adebayo, and executive secretary, Gbolahan Awonuga, expressed concern over the disparity in the treatment of quoted and non-quoted entities.
The body noted that the dues for quoted companies are calculated based on their market capitalisation and capped at a predetermined amount, while non-quoted companies are subjected to higher payments based solely on their turnover.
The association detailed the new dues structure, which includes the following tiers: 0.02 per cent of annual turnover for companies with N25 million or less; 0.025 per cent for turnovers above N25 million but not exceeding N50 million; 0.03 per cent for turnovers above N50 million but not exceeding N500 million; 0.04 per cent for turnovers above N500 million but not exceeding N1 billion; 0.045 per cent for turnovers above N1 billion but not exceeding N10 billion, and 0.05 per cent for turnovers exceeding N10 billion.
The disparity is particularly stark for private companies with turnovers above N10 billion, which would be required to pay N500 million annually, compared to the N25 million cap for publicly quoted companies with market capitalisations of N1 trillion.
ALTON argued that the new structure, while aimed at raising revenue for the government, could stifle the operations of private companies, especially, those in the telecommunications sector. The industry is already grappling with rising operating costs, foreign exchange volatility, and other economic challenges, making the new payment requirements particularly onerous.
To address the issue, ALTON proposed two alternative approaches. First, it suggested that dues should be calculated based on a company’s profit rather than its turnover. The association noted that , the telecommunications industry requires significant capital investment, often resulting in a wide gap between revenue and profit. For instance, a company with a turnover of N200 billion might declare a profit of only N15 billion, making a turnover-based dues structure disproportionately burdensome.
Second, ALTON called for the reintroduction of a predetermined cap on dues payable by non-quoted entities, similar to the cap applied to quoted companies. This, the association argued, would ensure fairness and mitigate the financial strain on private firms.
“We believe that implementing the new structure as it stands would place an undue burden on our members, potentially affecting their ability to maintain operations and provide critical services to Nigerians,” the association said.
ALTON reaffirmed its commitment to engaging constructively with the FRC to find a mutually acceptable resolution. The association offered to hold meetings with the council to discuss alternative solutions that would better reflect the realities of the telecommunications industry and the broader economic environment.
“We firmly believe that a collaborative approach would be in the best interest of the industry, the regulatory environment, and the overall economic well-being of the country,” ALTON suggested.
Monday, March 10, 2025
