Amid mounting debates over the proposed Tax Reform Bills, the Federal Government of Nigeria recently reaped a substantial tax windfall of approximately N2.5 trillion. This success was achieved when global information and communications technology (ICT) firms operating in the country complied with the Code of Practice for Interactive Computer Service Platforms and Internet Intermediaries.
Director-general of the National Information Technology Development Agency (NITDA), Kashifu Abdullahi must be basking in the euphoria of this milestone. The guidelines he introduced just over two years ago, despite their controversial reception, have now yielded indisputable results. Global giants such as Google, Microsoft, and TikTok adhered to the Code of Practice, bolstering Nigeria’s tax revenues and setting a precedent for regulatory compliance.
This achievement, covering the first half of 2024, was confirmed in a statement by NITDA’s director of corporate affairs and external relations, Hadiza Umar. She highlighted the agency’s efforts to establish a robust framework for protecting Nigerians against online harms, including hate speech, cyberbullying, disinformation and misinformation.
The Code of Practice outlines specific conditions for ICT platforms operating in Nigeria, including:
- Legal registration of operations with the Corporate Affairs Commission (CAC);
- Appointment of a designated country representative to interface with Nigerian authorities;
- Compliance with regulatory demands upon establishing a legal presence;
- Fulfillment of tax obligations in line with Nigerian law;
- Implementation of mechanisms to prevent prohibited content and unethical behaviour on platforms; and
- Cooperation with authorities to address harmful accounts, botnets, troll groups, and disinformation networks while ensuring swift removal of content that violates Nigerian laws.
The development of this code followed a directive from former President Muhammadu Buhari, who instructed NITDA to collaborate with other government agencies and stakeholders to create a framework for interactive computer service platforms. On June 13, 2022, NITDA unveiled the draft Code of Practice for public review, emphasising its alignment with international best practices as observed in democratic nations such as the United States, the United Kingdom, and members of the European Union.
This comprehensive framework was developed in partnership with the Nigerian Communications Commission (NCC), the National Broadcasting Commission (NBC), and input from platforms like Twitter, Facebook, WhatsApp, Instagram, Google and TikTok. Civil society organisations and subject matter experts also contributed, ensuring that the code reflects diverse perspectives and expertise.
The Code of Practice aims to protect the fundamental human rights of all residents in Nigeria while defining clear guidelines for digital interactions. It recognises the immense influence of online platforms on society, social interactions, and economic decisions. Consequently, the code seeks to recalibrate the relationship between these platforms and Nigerians to maximise mutual benefits and promote a sustainable digital economy.
The results of this initiative have been impressive. According to data from the Federal Inland Revenue Service (FIRS) and the National Bureau of Statistics (NBS), foreign digital companies, including social media platforms, contributed over N2.55 trillion (approximately $1.5 billion) in taxes in the first half of 2024. This significant revenue increase underscores the effectiveness of a robust regulatory framework in fostering compliance and driving growth in the digital economy.
Platforms have also demonstrated a commitment to addressing user safety concerns. Statistics reveal that in 2023, platforms received over 4.1 million registered complaints, removed 65.8 million pieces of harmful content, re-uploaded 379,433 items after user appeals, and closed or deactivated 12.09 million accounts.
NITDA has expressed its excitement over these developments and called for continued collaboration and innovation to tackle emerging challenges in the digital space. The agency emphasised the need for collective efforts to ensure a safer and more responsible online environment.
The Code of Practice further mandates platforms to act swiftly upon receiving notices from users or authorised government agencies about unlawful content. Specifically, platforms must:
- Remove or block access to non-consensual content, such as deepfakes or revenge porn, that aims to harass, discredit, or intimidate individuals;
- Disclose the identities of content creators when directed by a court order, particularly in cases involving national security, public order, or severe crimes like rape or child abuse.
NITDA has commended the platforms for their efforts in creating a safer digital ecosystem. However, the agency stressed that achieving this goal requires continuous collaboration with stakeholders to enhance user safety measures, digital literacy, trust, and transparency.
The agency’s mandate, as outlined in Section 1, paragraphs (b) to (e) of the NITDA Act of 2007, provides the legal foundation for its actions. These provisions empower NITDA to:
- Develop guidelines for ICT systems to support public and private sector operations, urban-rural development, and governance;
- Facilitate electronic governance and promote the use of electronic communication as an alternative to paper-based methods;
- Create standards for networking public and private sector establishments; and
- Establish frameworks for the standardisation and certification of IT systems in Nigeria.
NITDA’s proactive approach has not only ensured the compliance of global ICT platforms but has also demonstrated the potential of regulatory frameworks to drive economic growth. The agency’s efforts underscore the importance of balancing regulation with innovation to foster a thriving digital economy.
As Nigeria continues to navigate the complexities of the digital age, the success of the Code of Practice serves as a reminder of the transformative power of effective governance. It highlights the need for sustained efforts to address emerging challenges and harness the full potential of the digital economy for the benefit of all Nigerians.
By achieving a delicate balance between regulatory oversight and enabling innovation, Nigeria has set a benchmark for other nations. The N2.5 trillion tax windfall is more than just a financial achievement; it is a testament to the power of collaboration, foresight, and determination in shaping a prosperous future in the digital era.
