Nigerian Banks Put N33.7 Billion Into National Tech Development Fund In 2023

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In 2023, Ten commercial banks in Nigeria collectively contributed N33.7 Billion to the Nigeria Information Technology Development Fund (NITDEF). This substantial sum marks the highest annual contribution to date and reflects an increased commitment from the financial sector to support the nation’s technological growth.

 

The contributions were drawn from the banks’ pre-tax profits, as stipulated by the NITDA Act of 2007. This law mandates that companies operating in Nigeria with an annual turnover of N100 Million must pay 1 percent of their profit before tax into the fund.

 

Historically, the government has criticised many companies for failing to comply with this statutory obligation. However, the significant remittance from these ten banks in 2023 demonstrates improved compliance and support for the development of Nigeria’s tech ecosystem.

 

In contrast, the Federal Inland Revenue Service (FIRS) reported collecting N22.5 Billion for NITDEF in 2022, which was then the highest amount ever collected in a single year. The ten banks’ combined contribution in 2022 was N12.1 Billion, highlighting a remarkable 178 percent increase in 2023.

 

MTN Nigeria’s financial reports showed the company paid N5.6 Billion to NITDEF in 2022. However, their 2023 contributions were not disclosed, indicating possible gaps in reporting among major corporations.

 

The NITDA Act identifies several types of companies required to contribute to the fund. These include GSM service providers, all telecommunications companies, internet service providers, pension managers, banks, and insurance companies.

 

Failure to comply with this law can result in significant penalties. Companies that do not pay the levy within two months of a demand notice face fines of at least N1 million. Moreover, the CEOs of these companies can be prosecuted if the offence occurred with their knowledge or consent.

 

Despite these legal provisions, NITDA has acknowledged ongoing challenges in achieving full compliance. To address this, the agency held a stakeholders’ forum in Lagos in collaboration with FIRS, aiming to encourage more companies to fulfil their obligations.

 

The funds collected through NITDEF are vital for various initiatives. These include the implementation of the Nigeria Startup Act, the National Digital Innovation and Entrepreneurship Centre, and the National Digital Skills Strategy, which aims to ensure 95 Percent of Nigerians become digitally literate by 2030.

 

By showcasing the impact of these funds, NITDA hopes to enhance voluntary compliance. The agency believes that demonstrating the socio-economic benefits of the NITDEF can help taxpayers see the value of their contributions and support ongoing technological development in Nigeria.

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