Nigeria’s NITDA Proposes 1% Tech Sector Tax

Nigeria’s NITDA Proposes 1% Tech Sector Tax. The National Information Technology Development Agency (NITDA) is pushing for a new bill to regulate Nigeria’s tech sector and levy a 1% tax on technology companies.

Going down memory lane, the bill was first introduced in 2021 with the sole purpose of replacing the NITDA Act of 2007 with a new framework.

A key provision is a 1% profit-before-tax levy for tech companies with revenues exceeding 100 million naira.

NITDA argues the new act is essential for regulating Nigeria’s digital economy. They believe the current act is outdated and inadequate for overseeing the rapidly growing tech industry.

In a recent interview in the public space, Omoba Kenneth Aigbegbele, Executive Secretary of the Citizens Watch Advocacy Initiative (CWAI), Africa Tax Review had gathered that the expert threw his support begin the bill.

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In his words;

“The NITDA 2022 Bill will stabilize the regulatory environment and attract foreign and domestic investments in the telecom and ICT sectors.”

On the flip side, the bill since its inception has faced significant opposition from the tech community.

Recall that during a public hearing in December 2022, 14 out of 31 submissions opposed the bill. Critics are concerned about its impact on industry growth and its compatibility with other legislation, such as the proposed startup bill.

Nigeria’s NITDA Proposes 1% Tech Sector Tax: Opposing Arguments

Since the bill’s inception, experts continue to argue that the 1% tax could burden smaller tech companies and startups, stifling innovation and entrepreneurship.

They also worry about the broad regulatory powers the bill would grant NITDA, potentially leading to overlapping regulations with other agencies.

Despite the opposition, NITDA continues to express its commitment to enacting the bill as the agency believes the bill will provide a necessary regulatory framework, foster innovation, empower businesses, and promote technology use in sectors like education amongst others.


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