By Etta Michael Bisong
Abuja
The federal government has disclosed that the soon to be licensed Infrastructure Companies (Infracos) in the broadband spectrum will, among other incentives, get tax holidays of between five and seven years to cushion their investments.
This was one of the highlights of the Nigeria Investment meeting at the ongoing ITU World 2014 in Doha, Qatar.
Speaking at the forum hosted by the Minister of Communication Technology, Mrs. Omobola Johnson as part of Nigeria’s drive for more investors into the blossoming ICT sector, told participants that based on the Open Access Model, which has been tested and adopted for the licensing round, beneficiaries of the licenses shall among others, get tax holidays to encourage the Infracos to invest and guarantee adequate returns on investments.
Principal Partner of KPMG, Mr. Joseph Tegbe, one of the consultants to the soon to flag off licensing regime told the audience that the investors will be encouraged to veer into areas where many consider to be less commercially rewarding through subsidy, and grants may be given out to further their interest in such areas.
‘’They will also be granted pioneer status as part of the incentives to boost their interest in investing in such areas or zones that may look unattractive. Such Infracos will get such incentives that could be up to 30 per cent mark up on their capital expenditure (Capex) and employee tax holidays as well,’’ he said.
Tegbe explained further that to qualify for these, Infracos will quantify their Capex and what it will take to rollout and how long it will take to break even.
Executive Vice Chairman of the Nigerian Communications Commission (NCC), Dr Eugene Juwah, while remarking earlier told the audience including potential investors from Qatar National Bank, Global Operator, Ooredoo, Vodafone, Qatar and several Diplomats that Nigeria had achieved 96 per cent teledensity with over 134 million active subscribers, and ICT contribution to national GDP of over 10 per cent.
Although over $32bn had been invested in this area so far, the NCC boss observed that there is still a yawning gap in broadband penetration which stands at only six per cent at the moment.