The Nigerian Startup Act has been signed into law by President Muhammadu Buhari, which is seen as a positive step for accommodating startups with innovative products and services. However, stakeholders nationwide are calling for revisions to be made to the bill and for President Buhari to exercise caution when approving the controversial legislation.
One of the most contentious parts of the bill is Section 6, which grants the National Information Technology Development Agency (NITDA) significant powers to implement all government policies on information technology and the digital economy.
This includes imposing licensing and authorization charges, collecting fees and penalties, and sanctioning individuals and companies. The bill also allows the NITDA to invade company premises and exercise other broad powers.
Moreover, the bill proposes the creation of a National Information Technology Development Fund, which will be used to promote Nigeria’s digital economy objectives. Telecom operators will be required to pay a 1% levy before tax if they have an annual profit of $100,000,000, and grants, gifts, and endowments are among other proposed revenue streams.
Additionally, the bill states that all finances in the NITDA’s fund will be exempt from income tax. The telecom operators in Nigeria are concerned about the potential financial implications of this bill and have called for a review to be conducted to ensure fairness and transparency in its implementation.
Long-term Implications of The Nigerian Startup Act on Telecom Operators
As Nigeria’s technology industry flourishes, policymakers and stakeholders are expected to foster a conducive environment. However, the current version of the NITDA bill may undermine the progress of Nigeria’s digital sector. Allowing an agency originally tasked with promoting digital transformation to regulate other regulators is not wise. Additionally, the bill’s numerous taxes and penalties for violating the new regulations are not business-friendly.
These and other provisions in the bill may portray Nigeria negatively, making it less attractive to investors. The ATCON chairman warns that capital inflow will decrease. Unless the bill is revised and all problematic sections removed, the future looks bleak.
Concusion
Nigeria is facing persistent inflation, a high unemployment rate, and unrest in many regions. It is important to focus on strengthening Nigeria’s economic growth, not stifling it.
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