With the new National Information Technology Development Agency, NITDA bill 2007, either someone is driving drunk with the desire to realize a bad personal ambition or NITDA is overly ambitious in its desire to regulate the entire ICT sector, pushing the Nigerian Communications Commission, NCC, to the side.
Both outcomes, according to business experts, are bad for the nation. The existing Act, No. 28 2007 to provide for the Administration, implementation, regulation of information technology systems and practices as well as the digital economy in Nigeria and for connected matters is to be repealed and replaced by the bill sponsored by NITDA and sent to the National Assembly, NASS.
The new measure, according to NITDA, aims to address current digital concerns, revitalize Nigeria's economy, foster trust, and safeguard the rights and interests of ecosystem participants.
Closer examination reveals that the new measure will unintentionally damage the nation's standing as the telecom economy with the quickest rate of growth and dismantle the foundation upon which it was attained.
because the bill The entire ICT industry has changed since the bill entered the National Assembly and tried to become law.
The plan should be abandoned immediately, say several lawyers who have studied it, especially those biased toward information and communications technology, before the nation regrets its consequences later. The phrase "God forbid" was uttered by many ICT media professionals after they gave it a glance.
The country's foreign direct investment, which history has shown doesn't thrive in unpredictable political economies and unstructured legal systems, has begun to decline even as a law, according to prominent industry practitioners.
However, a bill that threatens to dismantle a reputable government agency with a track record of fostering the nation's prosperity through enabling legislation is still being promoted by some groups.
In order to determine what effect the proposed legislation would have on the industry if it became law, the NASS committee on ICT has been collecting opinions. The committee last met on February 2, 2023, and Hi-Tech has obtained a letter from telecom providers in Nigeria warning the committee against bringing a similar measure into law.
the message Through their umbrella organization, the Association of Licensed Telecom Operators of Nigeria (ALTON), they claimed that continuing to evaluate the draft bill would be a waste of time and that putting it into law would be disastrous.
The telecoms were adamant about the bill's immediate destructive effects on the Nigerian economy in general and the telecom sector in particular.
The NCC's autonomy will be destroyed, the Nigerian Communications Act, NCA Act of 2003 will be duplicated, and the commission's operations will be interfered with, among other impacts.
The telecoms assert that enacting the bill will make it easier to covertly raise the nation's corporate income tax rate to above 36%, making it the highest in the world.
We had a close read of the Bill and wish to draw your attention to the following sections of the Bill, according to a section of the letter written by the group's Chairman, Engr. Gbenga Adebayo, and Executive Secretary, Gbolahon Awonuga.
Agency's authority
The Agency is given authority under the terms of Sections 6(1) and (12) of the Bill. which gives the Agency the authority to test and approve the use of information technology infrastructure and services before adoption in Nigeria and Section 20 which gives the Agency the authority to make regulations and issue licenses and authorization for operators in the information technology and digital economy sector.
As stated by the provisions of Section 4(n) of the Nigerian Communications Commission Act (NCA), 2003, and for which the NCC Type Approval Regulations exist, this once again replicates the authority of the NCC, which includes performing type approval tests on communications equipment and issuing certificates on the basis of technical specifications and standards prescribed from time to time by the Commission.
Conflicts
"If the Bill is passed in its current form, there is a chance that the Agency, acting in accordance with the Bill, may adopt rules, directives, and standards on the use of digital services and information technology that will conflict with the NCC's responsibilities. Additionally, it will lead to two different sets of regulations for telecommunications businesses in Nigeria, possibly in conflict.
In Given the situation, we humbly ask that we be left out of the group of people who will be subject to the Agency's control and regulation with regard to information technology and digital services since telecommunications are currently governed by the NCC.
Fund for National IT Development
The National Information Technology Development Fund will be established by Section 13 of the Bill and will be used to advance the national goals for the digital economy and other related goals.
"The Bill stipulates that firms and enterprises, including mobile and fixed telecommunications operators, having a turnover of N100,000,000 (One Hundred Million Naira), should pay a fee of one percent of the profit before tax in order to fund the activities of the Fund.
We contend that the tax intended to be established by the Bill, in addition to existing taxes and levies, will overburden the telecommunications industry, even though ALTON as an association and our members as individual business entities are always aware of their tax obligations and other responsibilities. companies.
Currently, over 39 distinct taxes and levies, the most of which are redundant or exorbitant, burden Nigeria's telecommunications industry. If this new tax is combined with other levies, Nigeria's corporate income tax rate will effectively rise to roughly 36%, making it one of the highest rates in the world.
This will not portray our nation favorably. It will create the perception that our campaign isn't sincere about making doing business in Nigeria easier.
the ability to impose administrative penalties and seal property
In the letter, the telcos also stated that the Agency has the authority to visit locations, inspect, seize, seal, detain, and apply administrative consequences on violators of any Bill provision under Section 6(7).
While our members as law-abiding organizations are not opposed to regulation and do not intend to break any laws of our nation, we believe that Section 6(7) is overly wide and could allow the Agency to abuse its authority. Our worries are based on the fact that the Bill does not call for giving the defaulting person or business a prior warning or notice before the Agency exercises the authority to access property, search, seize, seal, imprison, and inflict administrative penalties on wrongdoers.
"Despite the fact that the Section states that the Agency's actions are subject to court orders of competent jurisdiction, the Bill does not specify whether the Agency must first seek and obtain court orders before using its authority to sanction defaulting individuals or entities or whether such orders may be obtained after the Agency has used its authority under the Bill. The Section is silent as to whether the orders are to be acquired ex-parte or on notice to the individual when the court order must first be sought and secured before the Agency takes any of the acts described in Section 6(7). It is unclear from the Section whether the orders should be obtained ex-parte or after giving notice to the person or entity that they are being sought against.
"Although the aforementioned measures to curb any excesses are suggested, we would prefer to completely exclude telecom businesses from the scope of the Agency's operations because there are no procedures for the Agency to consult with the NCC when promulgating any regulations.
Classes of Licences and Authorizations According to the provisions of Section 21 of the Bill, the Agency is empowered to categorize its licenses and authorizations under any of the following: (1) Product License; (2) Service Provider License; (3) Other Authorization; and (4) Other Authorization. Again, the concerns that the bill's regulations may conflict with existing NCC regulations or duplicate and further complicate them are not unfounded.
the activities they cover is that the Agency may unintentionally grant itself more authority than was intended by the legislation to be granted to it, or the Agency may unintentionally attempt to regulate activities currently within the control of other regulatory bodies.
The operators concluded the letter by reminding the committee members that NITDA's purpose as an agency is to develop the ICT sector; as a result, the bill should have concentrated on giving the agency more authority to carry out its mission rather than turning it into another regulator for the sector, which would have created unnecessary confusion and undone the economic progress the sector has already made in Nigeria. They adamantly asserted that the Bill's effects, if passed as it is currently written, would endanger their ability to continue operating.
Nigeria now levies a flat 30% corporate income tax on both resident and non-resident businesses. Although there have been debates about lowering this rate to encourage foreign investment and advance economic growth, it has not changed since 2012.
Companies doing business in Nigeria are furthermore liable for taxes such value-added tax (VAT), education tax, and withholding tax in addition to corporate income tax. In Nigeria, the current VAT rate is 7.5%, while the education tax is levied at 2% of assessable profits.
The complexity of Nigeria's tax laws and regulations should be noted, and businesses operating there are encouraged to consult experts to ensure they are in compliance with all relevant