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March 20, 2023

Nigeria’s Tax Appeal Tribunal rules that network facilities/infrastructure providers should not be subject to the National Information Technology Development Act levy

  • Nigeria’s Tax Appeal Tribunal has ruled that a company that does not qualify as a telecommunications company, even if it is active in the sector, is not subject to the National Information Technology Development Act (NITDA) levy.

  • Businesses in the telecommunications sector should review the nature/objective of their operations to determine if they should be subjected to the NITDA Levy.

Executive summary

On 3 February 2023, the Lagos division of the Tax Appeal Tribunal (TAT) ruled in favor of INT Towers Limited (INTT), in a tax dispute case bordering around the applicability of the National Information Technology Development Act levy (the levy) on the profit before tax (PBT) of INTT.

The TAT established that, while INTT should be considered a player in the telecommunications sector as can be determined from the definitions of Telecommunications contained in section 157 of Nigeria Communications Commission (NCC) Act, INTT’s object/nature of business does not qualify as a telecommunication company. Based on the above, the Lagos TAT held that INTT should not be subject to the NITDA levy in line with the provisions of section 12 and the third schedule to the NITDA.

By implication, Companies should not be subjected to the NITDA Levy solely based on their involvement with companies in the telecommunications sector but rather on a further review of their operations in line with the NCC Act and the third schedule of the NITDA.

Detailed discussion


INTT’s principal business activities include providing telecommunication infrastructure services such as deployment/construction of towers and tower equipment, and colocation, leasing and infrastructure sharing services.

INTT filed its annual self-assessment returns for the 2021 year of assessment (YOA) on the TaxProMax platform (the platform). The platform automatically computed 1% of its PBT as NITDA levy, and the Federal Inland Revenue Service (FIRS) subsequently served a notice of assessment to INTT for the levy. INTT upon receipt of the assessment objected to the FIRS’s assessment stating its basis for not being subject to the levy. The FIRS in response issued a notice of refusal to amend (NORA).

INTT further appealed to the TAT on the grounds that INTT is neither a telecommunications company nor a GSM service provider and thus should not be liable to pay the NITDA levy, pursuant to section 12(2)(a) and third schedule to the NITDA.

FIRS position

The FIRS contended that the fact that INTT had obtained a license from the Nigerian Communications Commission (NCC) to provide infrastructure sharing and collocation services as a network facilities provider and that it also obtained a Pioneer Status Incentive (PSI) under the telecommunications sector for installation of communication equipment.

Furthermore, the FIRS indicated that INTT had forfeited its right to dispute its status as a telecommunication company having enjoyed the PSI exemption incentive for companies in the telecommunications industry.

Based on the above assertions, the FIRS contended that INTT should be categorized as a telecommunications company and assessed the NITDA levy.

TAT judgment

The TAT, in response to the FIRS position, stated that INTT is definitely a business operating in the telecommunications sector. However, the nature of its activities and the objective of the company does not qualify it as a telecommunications company. Specifically, The TAT cited that the objective of the company did not reflect the activities of a telecommunications company.

Pursuant to the above, the TAT held that INTT should not be subject to NITDA levy in line with the provisions of section 12 and the third schedule to the NITDA.


While it is uncertain whether the case will be appealed by the FIRS, the TAT’s judgment should result in the granting of a discharge of the 1% NITDA levy assessed on INTT’s PBT for 2021 YOA.

Furthermore, businesses in the telecommunications sector should review the nature/objective of their operations to determine if they should be subjected to the NITDA Levy.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Nigeria, Lagos

Ernst & Young Société d’Avocats, Pan African Tax – Transfer Pricing Desk, Paris

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

Ernst & Young LLP (United States), Pan African Tax Desk, New York


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