TAX WINDFALLS FROM ICT PLATFORMS

Sonny Aragba-Akpore observes that ICT firms operating in the country have enriched the nation’s coffers to the tune of trillions

In the midst of the debate on the proposed Tax Reform Bills,the federal government recently made a bounteous harvest in taxes of about N2.5 trillion when global Information and Communications Technology (ICT) firms operating in the country complied with the Code of Practice for Interactive Computer Services/ internet intermediaries.

Kashifu Inuwa Abdullahi,the Director General of the National Information Technology Development Agency (NITDA) must be basking in the euphoria of this breakthrough as the guidelines he introduced a little over two years ago in controversial circumstances are yielding results.
Google, Microsoft,Tik Tok and others obeyed the Code of Practice for Interactive Computer Service Platforms/Internet Intermediaries, and Inuwa whose collaboration with other government agencies including the Nigerian Communications Commission (NCC) and others are savoring the glory.
These figures cover the first half of 2024 according to a statement by Hadiza Umar ,NITDA’s Director,Corporate Affairs and External Relations.
“The code establishes a robust framework for collaborative efforts to protect Nigerians against online harms, such as hate speech, cyberbullying, as well as disinformation and/or misinformation.
Similarly, to ensure compliance with the Code of Practice, NITDA also wishes to notify all Interactive Computer Service Platforms/Internet Intermediaries operating in Nigeria that the Federal Government of Nigeria has set out conditions for operating in the country.
These conditions address issues around legal registration of operations, taxation, and managing prohibited publication in line with Nigerian laws.”
The conditions include the need to:
*Establish a legal entity i.e., register with Corporate Affairs Commission (CAC);
*Appoint a designated country representative to interface with Nigerian authorities;
*Abide by all regulatory demands after establishing a legal presence;
*Comply with all applicable tax obligations on its operations under Nigerian law;
*Provide a comprehensive compliance mechanism to avoid publication of prohibited contents and unethical behaviour on their platform; and
*Provide information to authorities on harmful accounts, suspected botnets, troll groups, and other coordinated disinformation networks and deleting any information that violates Nigerian law within an agreed time frame.”
In line with best practices and In accordance with its mandates, President Muhammadu Buhari, directed NITDA to develop a Code of Practice for Interactive Computer Service Platforms/Internet Intermediaries (Online Platforms), in collaboration with relevant regulatory agencies and stakeholders.
Accordingly, NITDA presented to the public a code of practice for interactive computer service platforms/internet intermediaries for further review and input.
This was on June 13, 2022.
The code of practice is aimed at protecting fundamental human rights of Nigerians and non-Nigerians living in the country as well as define guidelines for interacting on the digital ecosystem.
“This is in line with international best practices as obtainable in democratic nations such as the United States of America, United Kingdom, European Union, and United Nations.”
The Code of Practice was developed in collaboration with the NCC and National Broadcasting Commission (NBC), as well as input from Interactive Computer Service Platforms such as Twitter, Facebook, WhatsApp, Instagram, Google, and Tik Tok, amongst others. Other relevant stakeholders with peculiar knowledge in this area were consulted such as Civil Society Organizations and expert groups. The results of this consultations were duly incorporated into the Draft Code of Practice now a code in line with “the new global reality stating that the activities conducted on these Online Platforms wield enormous influence over our society, social interaction, and economic choices. Hence, the Code of Practice is an intervention to recalibrate the relationship of Online Platforms with Nigerians in order to maximise mutual benefits for our nation, while promoting a sustainable digital economy.”
Hadiza Umar, quoting data from the Federal Inland Revenue Service (FIRS) and the National Bureau of Statistics (NBS) explained that these figures were clearly a windfall for the government.
This Code was issued jointly by the NCC, National Broadcasting Commission (NBC), and NITDA and it outlines clear guidelines for promoting online safety and managing harmful content including but not limited to the protection of children from harmful online content .
“Data from the Federal Inland Revenue Service (FIRS) and the National Bureau of Statistics (NBS) reveal that foreign digital companies, including interactive computer service platforms and internet intermediaries (such as social media platforms) operating in Nigeria, contributed over N2.55 trillion (approximately $1.5 billion) in taxes in H1 2024.
“This significant increase in revenue underscores the role of robust regulatory frameworks in shaping compliance and driving revenue growth in the digital economy,” NITDA stated.
Updates on the level of compliance with the Code of Practice for Interactive Computer Service Platforms/Internet Intermediaries, show that all the digital platforms made conscious efforts to address user safety concerns in line with the Code and the platforms’ community guidelines.
Overall statistics across all the platforms show that: “They received 4,125,283 registered complaints in 2023.
Content takedown: 65.8 million
Content removed and re-uploaded after appeal by users: 379,433
Closed and deactivated accounts: 12.09 million”
NITDA is excited and pleads “ for continued collaboration and innovation to address emerging challenges and ensure a safer and more responsible digital space.”
NITDA in June 2022 announced the Code, which seeks to moderate activities on social media blogs and online publications.
Specifically,the Code states that internet platforms including social media should as a rule “act expeditiously upon receiving a notice from a user, or an authorised government agency of the presence of unlawful content on its Platform.”
“Act quickly to remove, disable, or block access to non-consensual content that exposes a person’s private areas, full or partial nudity, sexual act, deepfake, or revenge porn, where such content is targeted to harass, disrepute, or intimidate an individual.
Disclose the identity of the creator of information on its Platform when directed to do so by a Court order.
“Provided that an order of this nature shall apply for the purpose of preventing, detecting, investigating, or prosecuting an offence concerning the sovereignty and integrity of Nigeria, public order, security, diplomatic relationships, felony, incitement of an offence relating to any of the above or in relation to rape, child abuse, or sexually explicit material.”
NITDA commends the efforts of the platforms for the goal of creating a safer
digital ecosystem which requires continuous collaboration and engagement with
all stakeholders to strengthen and enhance user safety measures, digital literacy, trust and transparency.