Reps direct CBN to suspend cybersecurity levy
..as NESG says it’s Untimely
Nigeria’s lower legislative chamber, the House of Representatives has asked the Central Bank of Nigeria(CBN) to withdraw the circular directing all banks to start charging a 0.5 per cent cybersecurity levy on all electronic transactions within the country.
This is just as the Nigeria Economic Summit Group(NESG) has said the timing of the levy was wrong.
The motion on the urgent need to suspend the implementation of the cybersecurity levy was moved by the member representing the Obio/Akpor Constituency, Kingsley Chinda.
Recall the recent circular by the apex bank directed all commercial, merchant, non-interest, and payment service banks, among others; to implement the levy within two weeks from Monday, May 6, 2024.
“The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy,’” the circular partly read.
In the motion, Chinda said, “The House notes that businesses which the said Section 44(2)(a) refers to are listed in the Second Schedule to the Cybercrimes Act to be GSM Service Providers and all telecommunication companies; Internet Service Providers; Banks and Other Financial Institutions; Insurance Companies and the Nigerian Stock Exchange.
“The CBN circular mandates all banks, other financial institutions and payments service providers to implement the Cybercrimes Act by applying the levy at the point of electronic transfer origination as “Cybersecurity Levy,” and remitting same.
“The wordings of the CBN circular leaves the directive to multiple interpretations including that the levy be paid by bank customers, that is, Nigerians, against the letters and spirit of Section 44(2)(a) and the Second Schedule to the Cybercrimes Act, which specifies the businesses that should be levied accordingly,” the lawmaker noted.
He argued that unless immediate steps are taken to stop the proposed directive of the CBN, “The Cybercrime Act shall be implemented in error at a time when Nigerians are experiencing the aftermath of multiple removal of subsidies from petroleum, electricity and so on and the rising inflation.”
Meanwhile, the Nigerian Economic Summit Group (NESG) has faulted the timing of the introduction of the 0.5% cybersecurity levy on electronic transactions recently introduced by the Central Bank of Nigeria (CBN).
A statement by the NESG on Thursday asked the Federal Government to reconsider the levy as Nigerians are currently groaning under multiple taxation and inflationary pressures.
The Nigerian Economic Summit Group said “amidst the cost of living crisis exacerbated by rising inflation, the cybersecurity levy is mistimed”, considering the high rate of financial exclusion and increased currency in circulation.
“The NESG posits that the levy should be targeted at high-net-worth individuals and a specific amount transferred electronically to allay the fears of the populace, who are still battling skyrocketing food and non-food prices. However, if this policy remains, several Nigerians will boycott electronic funds transfers, which does not even bode well for the government due to revenue loss from electronic transfer levy.
“The NESG, however, feels this is a critical time to implement such a policy. The impacts of the fuel subsidy removal, exchange rate reform, and, most recently, the removal of electricity subsidies still permeate the operating costs of businesses and citizens’ welfare.
“The government must be cautious of the numerous strenuous policies that stiffen the purchasing power and welfare of corporations and individuals. Therefore, the government needs to properly sequence reforms for efficient socioeconomic outcomes, especially those that strain the people.”
NESG also raised concerns that the policy was introduced at a time when the Presidential Committee on Fiscal Policy and Tax Reforms has not finalised its mandate.
“To avoid conflict of interests and ensure no policy misalignment, the NESG strongly believes that the levy should be deferred and proper consultation until the Fiscal Policy Committee deems it necessary to implement it.
“The cybersecurity levy needs to be reconsidered, considering the CBN’s concern about the high rate of financial exclusion and increased currency in circulation.
