Ten commercial banks operating in Nigeria collectively channeled a significant sum of N33.7 billion to the Nigeria Information Technology Development Fund (NITDEF) in the year 2023. This contribution, extracted from their pre-tax profits for the period, highlights a marked effort by the banking sector to support the advancement of technology in the country.
The government’s persistent call for corporate entities to honor their obligation of remitting 1% of their profits towards nurturing the Nigerian tech ecosystem has seen varied responses. However, the substantial contribution from these ten banks represents a notable milestone, potentially marking the highest recorded remittance to the Fund to date.
In comparison, the Federal Inland Revenue Service (FIRS), responsible for collecting the NITDEF levy on behalf of the National Information Technology Development Agency (NITDA), disclosed that it amassed a total of N22.5 billion in 2022, which then stood as the highest annual collection at the time.
The surge in contributions from the banking sector is starkly evident when juxtaposed with the cumulative NITDEF levy paid by the same banks in 2022, amounting to N12.1 billion. This notable increase of 178% underscores a heightened commitment towards driving technological advancement in the country.
A glimpse into the 2023 audited financial results of MTN Nigeria reveals a notable contribution of N5.6 billion towards the Information Technology Development Levy in 2022. However, there is an absence of records for the subsequent year.
The National Information Technology Development Agency (NITDA) Act of 2007 outlines the framework for the NITDEF levy, mandating companies operating in Nigeria with an annual turnover of N100 million to allocate 1% of their pre-tax profits to the Fund. The Act delineates a spectrum of entities obligated to pay the levy, spanning GSM service providers, telecommunications companies, cyber companies, internet service providers, pension managers, financial institutions, and insurance companies.
The Act also prescribes penalties for defaulting entities, emphasizing the importance of compliance to foster the sustainable growth of the tech ecosystem. Despite these provisions, NITDA has lamented the widespread non-compliance among companies, prompting collaborative efforts with FIRS to foster greater adherence through stakeholder engagement forums.
Speaking on the significance of the NITDEF, the Director-General of NITDA underscores its pivotal role in advancing the Agency’s mandates, particularly in achieving digital literacy targets and fostering innovation. He highlights the allocation of the Fund towards critical initiatives such as the National Digital Skills Strategy Implementation and the adoption of emerging technologies like Blockchain.
Echoing this sentiment, Kabiru Abba, the Service’s Lead for General Tax Operations at FIRS, highlighted the importance of the socio-economic impact of taxes to enhance voluntary compliance. He emphasizes the need for transparency in showcasing the tangible outcomes of tax contributions to encourage greater participation from taxpayers.
Victoria Ibiama
