TAX 2.4 TECHNOLOGY TAX
Introduced by the National Information Technology Development Agency Act (NITDA). Section 1 establishes the agency as a body corporate with perpetual succession and a common seal which may sue and be sued. Imposes 1 (one) percent tax on the gross profit of specified companies (telecommunication companies, financial institutions, insurance companies, etc.) whose income is above 100 million naira.
Section 2 establishes for the Agency, a Governing board which shall consist of a chairman, representative of the Federal ministry of Science and technology, ministry of communication, ministry of education, Standards of organizations of Nigeria, Nigerian society of engineers and 12 others… four of whom are affiliate bodies of the Computer Professionals’ Registration Council of Nigeria.
The board manages the National Information Technology Development Fund where the revenues (derived from the administration of the act) are paid.
According to the Act, its mandate is to actualise the IT vision and develop the Technology sector in Nigeria and promote public awareness and education in this regard. Section 5 notes that its objectives include, to bridge the digital divide within Nigeria and between Nigeria and the developed world… to bring the government and its services closer to the people through ICT-The preamble declares same.
This tax is administered by the FIRS by assessing companies to technology tax while assessing them to CITA-Section 16NTDA. The companies are to pay within 60 days from the date they are served assessment notice. Failure to pay within 2 months after demand notice attracts a fine of 1million. The proceeds shall be used for the development of information technology in Nigeria.
The NTDAgency is immune to taxation-Section 26 of the Act. Suits against the agency must be commenced within three months after the default occurred (i.e. right of action accrues) also the agency must have been served a month’s prior notice-Section 27. The pre-action notice should contain the cause of action, particulars of claim, relief sought and address of the intending plaintiff.
Judgement debt shall be paid from the fund of the Agency.
These taxes have been argued to wreck double taxation. Companies argue that after paying CIT of 30 percent, they pay education tax, technology tax, their shareholders still pay PIT, they still pay land use charge and tenement rates to the local government and so on… Whatever name they are called… a taxation of income under different guises-Dr Abiola Sanni. This may lead to multiplicity of taxes.