NITDA Pushes For New Act To Regulate Tech Sector, Levy 1% Tax

The National Information Technology Development Agency (NITDA) is actively pushing for the passage of a new bill that would transform the agency into a regulator for Nigeria’s tech sector and grant it the power to levy a per cent tax on technology companies.

The proposed NITDA Bill, first introduced in 2021, seeks to repeal the existing NITDA Act of 2007 and enact a new National Information Technology Development Agency Act.

One of the key provisions in the bill is the introduction of a one per cent profit-before-tax levy for companies operating in the tech sector with revenues exceeding 100 million naira.

According to NITDA, the new act is necessary to provide an effective regulatory framework for the development of Nigeria’s digital economy.

The agency argues that the current act, which established NITDA as a development agency, is outdated and inadequate to oversee the rapidly growing technology industry.

“The role of NITDA under the proposed Act would have no direct conflicts with other regulators in the industry,” stated Omoba Kenneth Aigbegbele, Executive Secretary of the Citizens Watch Advocacy Initiative (CWAI), which supports the bill. “NITDA 2022 Bill will stabilise the regulatory environment in the telecom sector in Nigeria and attract the much-needed foreign direct investments as well as domestic investments in the telecom and ICT sector in the country.”

However, the bill has faced significant opposition from stakeholders within the tech ecosystem.

During a public hearing held in December 2022, 14 out of 31 submissions opposed the bill, citing concerns about its potential impact on the industry’s growth and its compatibility with other technology-related legislation, such as the proposed startup bill.

Critics argue that the one per cent tax provision could be a significant burden for smaller tech companies and startups, potentially stifling innovation and entrepreneurship.

There are also concerns about the broad regulatory powers the bill would grant NITDA, with some stakeholders fearing it could lead to overlapping or conflicting regulations with other agencies.

Despite the opposition, NITDA remains undeterred in its push for the new act.

The agency believes that the bill will not only provide a much-needed regulatory framework but also foster innovation, empower businesses, and promote the use of technology in various sectors, including education and agriculture.

The NITDA Bill has already been considered by the Federal Executive Council and is currently awaiting further action from the National Assembly. .As the debate over the bill continues, the tech industry and stakeholders remain divided on whether the proposed changes will ultimately benefit or hinder the growth of Nigeria’s digital economy.