Gleaming through, you will notice the new National Information Technology Development Agency (NITDA) Bill clearly has digital platforms in mind.
Meanwhile, much as the bill seeks to introduce regulations and control of technology and digital economy, it’s not without landmines.
NITDA’s Bill reveals murky waters that local and foreign digital platforms operating in, or targeting Nigeria must now wade in.
Foreign digital platforms like Twitter, WhatsApp, Instgram, etc must adhere to NITDA’s requirements to avoid troubles.
Also, local payment, betting and other tech platforms like Betnaija, supper sports, Jumia, Abeg, Patricia, are not left out too.
Similarly, video and music streaming platforms like Showmax, Boomplay, Spotify, Netflix, DSTV, StarTimes, Soundcloud, etc are in the roll call.
Also, telecommunications companies and insurance companies will equally have NITDA knocking at their doors for friendly or unfriendly greetings.
NITDA wants to license tech companies operating in Nigeria, collect pre-tax profit levies from them and sanction erring ones.
And NITDA has got all these laid out under its licensing, authorization and penalties for going contrary to the provisions of its Act.
What you must then know:
Undeniably, there has been an increase in the adoption of digital solutions and consumption of digital contents in Nigerian.
Meanwhile, with this increasing adoption of digital solutions, including from technological platforms, there have also emerged associated threats.
Today, we talk about virus and cyber attacks, data theft, phishing, cyber-bullying, internet frauds, etc.
These threats and endless innovations in technology and digital economy have continued to push governments towards regulations and control.
Also, other reasons such as achieving Nigeria’s digital growth plan forms NITDA’s goal of repealing the 2007 Act establishing it.
NITDA also keeps pace with technology innovations sweeping Nigeria by repealing the old act.
So, in the new bill, NITDA has proposed some requirements that, with analysis, could put tech platforms to a tight corner.
What’s in the new Bill:
In Part V of the bill, under Licensing and Authorisations, Section 20 states the requirements for Licences, Registrations and Authroisations.
It states that NITDA “shall by Regulation, issue licences and authorisations for operators in the information technology and digital economy sector, and such regulation shall provide for licensing and authorisation criteria including renewal, suspension, and revocation conditions to promote free market operation and competition, among others.
It also said NITDA “shall determine and register operators in the information technology and digital economy sector. Such register shall be published” and “any person or body corporate who operates an information technology or digital economy service, product or platform contrary to the provisions of this Act commits an offence.”
Section 6 of NITDA’s amended bill gives NITDA powers which include: fixing licensing and authorization charges, collecting fees and penalties and issuing contravention notices and non-compliance with the Act.
NITDA also reserves the right to “enter premises, inspect, seize, seal, detain and impose administrative sanctions on erring persons and companies who contravene any provision of the Act, subject to a court order.”
More on the Bill:
In Section 13, the agency proposes establishing a fund (The National Information Technology Development Fund).
The fund is to carry out Nigeria’s digital economy objectives and NITDA wants to finance the fund through the following:
Grants-in-aid, fees, accrued money under administrative payments and levies charged from tech companies.
It means all tech platforms having interest in Nigeria, like Twitter, Facebook, Instagram, etc will now pay tax.
Also, they must have infrastructure in the country before they can operate legally.
Additionally, they must get the agency’s license, inspection and approval before they can operate.
Meanwhile, the bill states that tech companies making an annual turnover of N100 million (~$200,000) will have to pay a levy of 1% of their profit before tax.
Significance to tech platforms:
It is not difficult to verify that big tech platforms, including some local ones operating in Nigeria have turnover greater than N100 million.
Similarly, in Section 20 of the, NITDA says it will issue licenses and authorizations for tech companies under three classes, viz: Product, service provider and platform providers.
It further provided penalties for any individual or company that does not get these licenses or pay the 1% levy.
“Any person or body corporate who operates an information technology or digital economy service, product, or platform contrary to the provisions of this Act, commits an offense.”
Individuals found guilty by the agency will be fined not less than N3 million (~$6,000) or placed into custody for a year or more.
Also, in the bill, the agency can also decide to charge such a person both the fine and imprisonment.
Similarly, any corporate body that defaults will pay a fine of N30 million (~$60,000). Also, the “principal officers” of the companies may also serve a prison sentence for two years or more.
The bill also states that any individual or corporate organisation that obstructs NITDA’s personnel from carry out inspection, and other duties under the Act will be fined not less than N3 million (~$6,000) and N30 million (~$60,000), respectively.
It also threatened prison terms of one or two years for individuals and principal members within a corporate body.
To cap its penalties, the Bill states that failure to pay the levies after two months will be liable to a daily fine of 0.5% of the total amount of the original levy.
This, clearly is a landmine for tech platforms as the condition for existence is becoming very murky.
Meanwhile, remember how recently, the Federal Government suspended the activities of Twitter in Nigeria.
Ever since the suspension, the platform remained barred, even though the government claims its in talks with Twitter and may unban the platform soon.
However, with this NITDA’s proposed regulations, tech platforms now have a real sledgehammer to dodge or live with.
Implication of the bill to tech platforms:
If you don’t have license from NITDA, you will not operate in Nigeria.
Also, for you to operate, you must obtain a license from NITDA.
and until NITDA authorizes you to go ahead, you won’t operate.
Additionally, the licenses will be renewed at intervals and that is cost on the side of the platforms.
Also, all tech platforms with annual profit before tax of N100 million will pay levies.
So, regardless of other taxes existing, technology companies will now pay more tax.
The atmosphere is also scary as no principal officers of any organization would want to go to jail.
But the bill authorizes NITDA to arrest, detain and send to jail, principal officers of any erring organization.
Ultimately, it is a welcome development to regulate the tech industry.
However, penalties should not scare the platforms away to neighboughring countries.