Afrigather Nigeria’s Nationwide Meeting is inviting the general public to a one-day public listening to on the draft invoice for the nation’s ICT regulator, NITDA.
First proposed in 2021 by NITDA director-general, Kashifu Abdullahi, the invoice seeks to repeal the Nationwide Data Expertise Growth Act No 28 of 200, and enact the Nationwide Data Expertise Growth Company Act.
The amendments within the proposal embrace provisions for brand new license categorisations, licensing charges, 1% profit-before-tax levies for firms with revenues larger than ₦100 million ($243,831), and jail sentences for defaulting events.
Earlier this yr, in July 2022, TechCabal broke news of the Federal Government Council’s (FEC) consideration of the invoice. Now, the bill has moved a step additional with its entry into the Nationwide Meeting. On December 23 on the Nationwide Meeting in Nigeria, the legislative will maintain a public listening to the place stakeholders in Nigeria’s tech ecosystem can weigh in on the invoice.
Nigeria’s duplicitous tech legal guidelines
Since its announcement, the invoice has generated a wholesome quantity of controversy surrounding its objective and its incompatibility with different tech-related payments, most notably the recently-enacted Startup Invoice.
In October 2022, Nigerian president Muhammadu Buhari passed the Nigeria Startup Act (NSA), an Act created in collaboration with 30 tech leaders together with the SSA on digital transformation to President Buhari, Oswald Guobadia, Ventures Platform founder Kola Aina, NITDA officers, and the minister of digital economic system Isa Pantami. Adherents of the NSA have criticised NITDA’s draft invoice and raised alarm on the duplicity of the invoice.
“The NSB was created to keep away from payments like NITDA’s. It’s additionally fairly incompatible with the NITDA invoice,” mentioned Davidson Oturu, a accomplice at Aelex Authorized, in a name with TechCabal in July.
Noting the contrasting provisions, Oturu talked about that the NSB—now NSA—has provisions for tax breaks for brand new startups however the NITDA invoice is concentrated on taxing startups. In Half VI, Part 16, the invoice gives for the creation of the NITDA Fund which will probably be used for the “development of digital economic system and associated functions”. The issue, in keeping with Oturu, isn’t with the aim of the fund, however with the structure of the fund. In subsection (a), the invoice states that every one firms with annual turnovers over ₦100 million ($240,000) will probably be required to pay an annual levy value 1% of their revenue earlier than tax.
Nigerian startups are already topic to different taxes together with a 20% tax paid to the Federal Inland Income Service (FIRS) for firms with over ₦25 million in turnover, and an schooling tax value 2.5% of their assessable revenue per yr for all registered startups.
Victoria Manya, government director at Advocacy for Coverage and Innovation (API) additionally highlighted the problems in Half VI, a phase many think about essentially the most troublesome a part of the draft invoice.
Titled “Offences and Penalties”, Half VII lists out offences and penalties comparable to a ₦30 million nice and a couple of years imprisonment for working with out licenses. Startups and corporations who additionally fail to pay the annual 1% levy fined 2% of the unpaid levy. The place the corporate refuses to pay the levy inside 2 months after the discover, the corporate will probably be liable to pay 0.5% of the payable quantity per day.
“The availability in part 25 has additionally made NITDA a decide in its personal course,” mentioned Manya. “The place do we start to know the motivation behind criminalizing an already unjust scenario.”
Can stakeholders save the day?
Within the making of Nigerian legal guidelines, public hearings are a part of the early phases of an extended course of.
In its invitation, the Nationwide Meeting invitations all tech stakeholders together with civil society organisations (CSOs), ministries and the “complete enterprise neighborhood” which on this case consists of the Nigerian tech ecosystem.
“There’s sufficient time for techpreneurs to lift their voices,” Oturu advisable. “Techpreneurs can put together a place paper and share it with the Ministry of Justice. And if that doesn’t work, the Nationwide Meeting, on the Committee Stage, will name for stakeholders to ship of their memorandum and voice their issues at a public listening to. A very powerful factor to do proper now could be to talk up and voice issues.”
