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NITDA Bill: Tech startups to pay ICT development levy

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A review of the NITDA Act is aimed at expanding the scope of ICT regulation in the country.

 

Technology startups in the country are now to be subjected to regulation by the National Information Technology Development (NITDA), New Telegraph has learnt.

The firms are also expected to contribute one per cent of their annual profit before tax to the National Information Technology Development Fund (NITDEV).

 

This is according to the provisions NITDA Act amendment Bill, which is now before the National Assembly. The Bill is seeking to expand the powers of NITDA as the country’s ICT regulator to include all tech companies operating in the country.

Section 20 of the Bill, a copy of which was seen by our correspondent, gives NITDA the power to issue licenses and authorizations for tech companies regardless of their size.

 

The licenses are classified into three sections: Product, Service Provider and Platform Provider. While the stakeholders had over the years called for the review of the NITDA Act as it has become outdated, many are worried that the provisions of the amendment Bill may stunt the progress of tech startups in the country.

According to them, overregulation of the burgeoning startup ecosystem could discourage investors. While the current NITDA Act 2007 also makes provision for the establishment of NITDEV, the new Bill expands the categories of companies that will be contributing to the Fund.

The Act stipulates the companies to contribute one per cent of their profit before tax to the fund as GSM service providers and all telecommunications companies; Cyber companies and Internet providers; Pensions managers and pensionrelated companies; Banks and other financial institutions; and insurance companies.

 

The Bill, however, expands the net to include digital platform operators and providers; foreign digital platforms targeting the Nigerian market; information technology, e-commerce companies; and “such other companies and enterprises as determined by regulations from time to time by the agency.”

 

Section six of the Bill empowers the agency to “implement all government policies on information technology and digital economy; test, and approve the use of information technology infrastructure and services before adoption in Nigeria; and develop regulations  guidelines, and directives on the use of information technology and digital services in every sector of the economy to attain the purpose of the agency.”

 

According to the Bill, NITDA is also “empowered to fix licensing and authorisation charges, collect fees and penalties as may be necessary for the exercise of its functions under this Act; issue notices of contravention and non-compliance with this Act, regulations, standards and guidelines made 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; and demand and monitor compliance with regulations, standards, guidelines and directives issued under this Act.”

 

The ammendment to the Act, NITDA said, was to create an effective, impartial, and independent regulatory framework for the development of the Nigerian information technology sector and digital economy.

 

It is also expected promote and implement policies and strategies on national information technology and digital economy as created by the government; Promote and support initiatives that provide access to digital services in an efficient, inclusive, secure, and affordable manner; and encourage local and foreign investments in information technology and digital economy through regulatory interventions.

 

According to the agency, the amended Act would also “promote the deployment and use of indigenously produced goods, services, and platforms for the development of the digital economy; promote the use of innovative digital services, systems, practices, and emerging technology in Nigeria; promote indigenous research and development in information technology and digital economy; and protect the rights and the interest of all consumers, investors in the Nigerian information technology.

 

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