Software Applications are often developed by taxable individuals or companies who in turn remit to the government in the form of taxes based on the generated revenue from software application. The viability of the software companies as well as the tax remittance from software industry is clearly affected by the poor availability and high cost of internet access. The software companies and engineers generate better revenue as more people use their software applications or require their software services. With the high cost of internet access and poor available internet, the revenue generated by the software industry is highly affected and consequently, its tax remittance to the Nigerian government.
In 2018, Nigeria was globally ranked 7th for internet subscribers, with over 110 million monthly internet subscribers. (source: stearsng.com). The scope of internet data usage in Nigeria ranges from corporate online services, social media applications, blog sites, bet sites, school research sites, search engines, gaming sites etc. However, this does not truly depict the reliability and cost of network access as data is expensive and the service either too slow or not optimal. Consequently, many of these internet subscribers end up spending a good chunk of their income for internet access, while others resort to the strategy of turning off their data intermittently and avoiding most data consuming apps such as Instagram, Netflix, Youtube etc.
These problems pose a serious cost to the Nigerian government and society as significantly revealed by the Covid 19 pandemic, whereby one of the government’s fastest orientation and communication channel to the public became social media platforms, which in turn required its users to be connected to the internet. However, millions of Nigerians were kept offline due to high cost of internet access. This revealed the shocking inequalities in internet access and affordability within the country.
According to Alliance for Affordable Internet Affordability Report 2020 on how to overcome internet availability barriers, the recommendations focus on the policy and regulatory environment as it affects network infrastructure availability, stakeholders’ relationships and its market dynamics. The Report calls for government to develop effective national broadband plans designed for the public interest to reduce the cost of internet access and enable more people connect to the internet.
The software industry continues to play an increasingly important role in the country’s economy. Flutterwave, a Nigerian fintech company attracted a foreign direct investment to the sum of $170 million and is valued at $1B. Paystack, another Nigerian fintech company was acquired by Stripe; US-based payment gateway company; for more than $200 million. This is beneficial to the country’s economy as profit generated contributes to corporate tax revenue as well as develops human capital development by providing employment for the workforce. For the continued growth of the software industry in Nigeria, the government should be urged to reassess their policies and innovate solutions that address the factors that influence the cost of internet access, in order to make it affordable and efficient for all.