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NITDA’s amended bill shows more licenses, levies and penalties are underway for Nigeria’s tech sector

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A leaked bill circulating on social media shows that the Nigerian Information and Technology Development Agency (NITDA) is proposing amendments to its regulatory Act which will give the agency more control over Nigeria’s budding technology ecosystem.

For a while, the agency has had talks about revamping the outdated 2007 Act of Nigeria’s information and technology body.

In March, the Director-General, National Information Technology Development Agency, NITDA, Mallam Kashifu Inuwa Abdullahi, presented a proposal for the realignment of ‘NITDA Act 2007’ with the tenets and ideals of the Digital Economy Policy of the current administration.

He clamoured for the need to keep up with the trend of accelerating changes within the IT ecosystem by stressing the need for the review of the ‘NITDA ACT 2007.’

In summary, the amended bill states that NITDA wants tech companies operating in Nigeria to get a license, pay pre-tax profit levies, and sanction whoever (person or company) that operates contrary to the new Act’s provisions.

What’s in the amended bill?

The proposed bill includes standard provisions which list the duties and obligations of the agency. NITDA will regulate the use, development, standardization, research, and application of information technology, emerging technology and digital services practices, activities and systems in Nigeria.

Section 6 of the bill outlines the powers that the Agency will have. Some of them include:

  • Fix licensing and authorization charges, collect fees and penalties as may be necessary for the exercise of its functions under this Act.
  • Enter premises, inspect, seize, seal, detain and impose administrative sanctions on erring persons and entities who contravene any provision of this Act subject to the order of a court of competent jurisdiction.
  • Demand and monitor compliance with regulations, standards, guidelines and directives issued under this Act.
  • Enforce, in collaboration with law enforcement agencies, the provisions of this Act.

Levies, Offences and Penalties

In section 13, NITDA proposes establishing a fund (The National Information Technology Development Fund) to carry out the country’s digital economy objectives which will be funded by grants-in-aid, fees, gifts, and levies.

It also stated in the bill that all companies with an annual turnover of ₦100,000,000 would be required to pay 1% of their profit before tax as levies.

In section 20 of the leaked bill, NITDA says it will issue licenses and authorizations for tech companies regardless of their size. The licenses are classified into three — product, service provider, and platform provider.

According to the bill, “Where a person or body corporate fails to comply with the regulations, standards, guidelines, frameworks, circulars, directives or any subsidiary legislation issued by the Agency in the discharge of its duties under this Act, such person or body corporate commits an offence and is liable on conviction.”

Individuals found guilty by the agency will be fined not less than N3 million or be imprisoned for a year or more. The bill states NITDA can also decide to charge such a person both the fine and imprisonment.

A fine of not less than N30 million will be charged against corporate bodies. The ‘principal officers’ of the companies may also serve a prison sentence for two years or more.

And individuals or corporates that deny personnel from the agency to carry out duties under the Act will be fined not less than N3 million and N30 million, respectively. Prison terms range from a year to two in this section for individuals and members within a corporate body.

Any company which falls into the category of paying levies and does not pay after two months will be liable to a fine of 0.5% of the total amount to be paid every day after the default.

This amended bill has sparked a lot of outrage on Twitter.

Iyinoluwa Aboyeji, the co-founder of Andela and Flutterwave, said in a tweet “If you are a tech company in Nigeria, given NITDA Nigeria’s plan you should start building in Nigeria…and take global expansion seriously.”

Victor Asemota said, “Las las, maybe it is to resign from all Nigerian tech boards and let everyone move their companies to Delaware and collect payments in crypto. Seems they are looking for tech people to imprison.”

Another Twitter user said, “I will ask again…You are raising thousands and millions of dollars in funding and you don’t have lobbying groups working for you to also influence policies? Americans and Europeans should teach this also. It is not enough for a whole industry to continue to be reactionary.”

A respondent from the Agency who spoke under condition of anonymity told Nairametrics that the bill hasn’t been passed yet and is still under review for now.



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