The American Business Council has raised concerns over the proposed National Information Technology Development Agency (NITDA) bill yet to be passed into law.
The body noted that there are ambiguous sections of the bill which should rather be properly spelt out so operators in the Information Communication and Technology Industry could fully understand what implications this might have for their businesses.
SaharaReporters had on Tuesday reported how sources in NITDA revealed that Nigeria’s Minister of Communications and Digital Economy, Isa Ali Pantami, bribed officials within the agency to enforce a bill targeted at destroying ICT startups in the country.
Sources, who spoke with SaharaReporters, had stated that the minister had been putting in efforts to destroy the technology sector and impose his fundamentalist ideals on the works of other agencies.
In its reaction, the American Business Council stated, in a document sent to SaharaReporters, that the functions of the agency, which are similar to that of other agencies, are not defined.
It noted that the section 5, subsections 1, 5, and 10 highlighting the promotion of investments, universal access and the certification of information technology services and practices is almost encroaching on the functions of the Universal Service Provision Fund and the Nigerian Investment Promotion Commission set up for similar purposes.
It also stated that subsections 12 and 13 of sections 5 are passed into law, there are potentials for administrative bottlenecks, multiple-regulation and replicated taxation.
The council then recommended the establishment of an Inter-Agency Desk at the National Communication Commission to facilitate the needed collaboration among NCC, USPF, NIPC and NITDA “to achieve the intendment of these provisions”.
It also raised concerns over the unclear meaning of “digital services, products and platforms, administrative sanctions” as stated in the bill.
The American Business Council said, “the functions and powers of the NITDA need more clarification. It is difficult to contemplate how NITDA aims to exercise extraterritorial jurisdiction over foreign digital platforms or digital services, products and platforms operating in Nigeria when the rules and parameters are not properly defined. “Digital services, products and platforms” are not defined under the Bill, making it unclear who the Bill aims to regulate, what triggers are required to qualify such platforms, services or products for regulation, or any exceptions to the regulatory scope.
“In addition, “administrative sanctions” are not defined anywhere in the Bill. Clarification and adequate guidelines are necessary to avoid an inequitable interpretation of these provisions and forestall arbitrary exercise of these powers.”
The council, therefore recommended that digital services, products and platforms should be properly defined to enable stakeholders identify and understand its scope adding that the body should draft regulations/guidelines providing for the administrative sanctions.
Also, a section of the bill implied a levy of one percent of the profit before tax of companies and enterprises enumerated in the Third Schedule to the Bill with an annual turnover of N100,000,000 (One Hundred Million Naira) and above.
The council, in reaction to this part, noted that this will simply increase the operational cost of telecom operators in Nigeria who are already fraught with myriad of taxes.
It also stated that the Bill had yet to define “foreign digital platforms” or what constitutes “targeting the Nigerian market”, making the application of the NITDA Levy extremely ambiguous as it could potentially be applied to any foreign website anywhere in the world, creating onerous business and regulatory environments for foreign stakeholders.
It also pointed out that for foreign stakeholders, it is unclear whether the turn over threshold which will make an entity subject to assessment of levy is the total annual turnover of the entity, the annual turnover derived from its operations in Nigeria, or both.
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The council also recommended that the bill should clearly spell out the enforcement mechanisms that can be adopted by the NITDA and FIRS to ensure payment of the levy by owners of the foreign digital platforms.
Speaking on the licensing, the American Business Council noted that the NITDA bill sets out three classes of licenses including: (a) Product License; (b) Service Provider License; and (c) Platform Provider License.
However, the bill is silent on the purpose of each license.
It said, “Given the definition of platform, that is ‘any digitally enabled system used in the provision of service or product’, a single entity may be regarded as requiring all the licenses.
“The Bill’s failure to specify the purpose/ scope of each license results in entities being unable to assess the category they fall under, and in effect may lead to interpretation effectively requiring an entity to obtain all licenses for the same product/service/platform.”
It advised the Nigerian government to look into these licenses and authorisations which may birth distractive commitment of resources and possibly lead to multiple regulation which will affect the ease of doing business in Nigeria.
“For example, telecommunications regulation which is an ambit of information technology and digital economy sector already being adequately regulated by NCC. This section may create friction between NCC and NITDA. NITDA should cede primary responsibility to NCC in these areas.”
It added: “In conclusion, we kindly request that the recommendations and issues highlighted in our submissions be taken into consideration, and that the provisions of the Bill be amended to consider our recommendations.
“Multiple regulations/licensing and taxation would be a derailer to Nigeria’s growing digital economy. The implementation of the Bill as is may hinder foreign investment in Nigeria and in the long run have adverse effects on the Nigerian economy.
“More clarity as to the scope, implementation and enforcement of the Bill is needed for foreign entities in this sector to continue having a beneficial and mutually rewarding relationship with Nigerians.”