Nigeria Tech Tax: A NITD Act Summary and Comparison to the Leaked Bill

Nigeria Tech Tax: A NITD Act Summary and Comparison to the Leaked Bill

A few days ago, a leaked bill amending the National Information Technology Development Agency Act 2007 started to circulate in Nigeria. This alleged bill imposes a new levy for tech, digital startups and other related companies. 

We wish to highlight that this is only an alleged bill!

The Nigerian National Assembly (NASS) has not received the bill as of yet.

However, In March 2021, Kashifu Inuwa Abdullahi, the National Information Technology Development Agency’s DG, “presented a proposal for the realignment of ‘NITDA Act 2007’ with the tenets and ideals of Digital Economy Policy of the current administration.

The below article summarises the modalities of the National Information Technology Levy and the potential changes according to the leaked bill. 


What is the National Information Technology Development Agency Act 2007 all about?


The National Information Technology Development Agency Act was enacted in 2007 and has two broad roles.

Firstly, it encourages government departments to transition to digital technology systems.

Secondly, it also guides the private sector on standards for digitizing the economy.


What is this tech levy and what does it seek to impose?


The 2007 Act created a National Information Technology Development Fund.

The fund is used to advance the country’s digital economy objectives and other related purposes. It is financed by the imposition of a levy. 



The National Information Technology Development Agency Act 2007 imposes a levy of 1% of the profit before tax of companies and enterprises enumerated in the Third Schedule of the Act.

This levy would only apply to companies and enterprises with an annual turnover of N 100, 000, 000 and above.

The Act also provides that all monies accruing to the Fund is exempted from income tax, and all contributions to the Fund is tax-deductible.


Under the Leaked Bill:

This section remains unchanged.

The rate is still 1% of profit before tax and chargeable on specified companies with a turnover of N100 million and above.


What are the companies and enterprises under the Third Schedule and therefore liable to this levy?



Under the current Act, the companies and enterprises affected are:

  1. GSM Service Providers and all Telecommunications companies
  2. Cyber Companies and Internet Provider
  3. Pensions Managers and pension-related companies
  4. Banks and other Financial Institution
  5. Insurance Companies

Under the Leaked Bill:

The companies and enterprises include –

  1. Mobile and fixed telecommunications companies
  2. Information technology, e-commerce companies
  3. Digital platform operators and providers
  4. Foreign digital platforms targeting the Nigerian market
  5. Pensions managers and pension-related companies
  6. Banks, financial institutions and companies providing financial services using information technology tools
  7. Insurance companies
  8. Such other companies and enterprises as determined by regulations from time to time by the Agency

The Bill proposes to widen the companies that would be affected by this levy. It targets specific tech companies such as digital platform operators and e-commerce companies amongst others.


What is the collection method?


The Federal Inland Revenue Service (FIRS) assess and collect the levy.

This remains unchanged. 


When is this levy be due?


The levy is payable within 60 days after the FIRS has served notice of assessment on a company.

This remains unchanged. 


Offences and Penalties



Upon non-payment of a levy due, the FIRS shall serve on the company a demand note for the unpaid tax plus a sum which is equal to 2% f the levy.


Under the Leaked Bill:

Non-payment of demand notice of an assessed levy within 2 months is an offence.

A fine of 0.5% of the assessed sum will be charged for every day of default.



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