• Business - Economy
  • Updated: May 09, 2024

Cybersecurity levy: Outcry, lamentation, rejection 'greet' CBN new policy

Cybersecurity levy: Outcry, lamentation, rejection 'greet' C

The Central Bank of Nigeria, CBN, on Tuesday, May 9, 2024 instructed banks operating in the country to start charging a cybersecurity levy on transactions.

The circular was directed to all commercial, merchant, non-interest and payment service banks, other financial institutions, mobile money operators and payment service providers.

The CBN said that all banks, other financial institutions and payment service providers are now required to implement the directive, saying, “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’.

“Deductions shall commence within two weeks from the date of this circular for all financial institutions and the monthly remittance of the levies collected in bulk to the NCF account domiciled at the CBN by the fifth business day of every subsequent month,” the bank instructed.

Considering the prevailing economic woes facing Nigeria following the recent hike in electricity tariff, and increase in fuel price, this development has stirred varied reactions from Nigerians. 

Recall that the federal government has recently increased tariff on electricity. The increment has already been implemented affecting majorly customers on band A category. This has continued to generate series of controversies. 

Prior to the electricity tariff increment, the government had removed fuel subsidy. The ripple effect of the removal has further affected the economy as cost of living rose astronomically almost immediately. 

But the latest levy imposed on Nigerians in the name of cyber security has attracted a similar protest and condemnation from Nigerians. 

Civil society groups, Labour leadership and experts have come all our to condemn the new policy, saying it is insensitive for the government not to listen to the cry of the people and to continue to put more pressure on Nigerians. Another person who did not hide his feelings was the candidate of the Labour Party in the last concluded national election, Peter Obi. He also called on the government to suspend the new policy immediately.

 Cybersecurity levy is another anti-people policy - NLC

The Nigeria Labour Congress, NLC, kicked against the newly introduced cybersecurity levy by the Central Bank of Nigeria, demanding its immediate withdrawal.

The NLC on Tuesday in a statement signed by its President, Joe Ajaero, lamented that the levy was another anti-people policy of the government, imposed amid economic hardship.

Ajaero noted, “NLC vehemently condemns the recent directive by the Central Bank of Nigeria to levy a 0.005 per cent ‘Cybersecurity Levy’ on electronic transfers.

“This levy, to be implemented by deduction at the transaction origination, is yet another burden on the shoulders of hardworking Nigerians. This move, ostensibly aimed at bolstering cybersecurity measures, threatens to exacerbate the financial strain already faced by the populace.”

Cybersecurity would drive Nigerians away from formal banking system -TUC

Similarly, the Trade Union Congress on Tuesday opposed the introduction of a cybersecurity levy by the Federal Government, describing it as a move that would drive Nigerians away from the formal banking system.

Speaking in Abuja on Tuesday, the National Vice President of TUC, Tommy Etim, said, “It is highly unfortunate. It is also another way to discourage people from banking. If people are discouraged from banking because of deductions such as cybersecurity levy, and admin charges, it means that the informal economy, manufacturing economy and entrepreneurs will suffer.

“It’s unfortunate that the government will carry out such a sensitive issue without stakeholder engagement. Nigeria is too big to be taken for granted. The time has come for them to know that democracy involves the people. The National Assembly should not allow this to happen otherwise it will be discouragement in terms of banking transactions. Nigeria’s problems cannot be solved overnight.”

 Cybersecurity levy is grossly unlawful - SERAP

Socio-Economic Rights and Accountability Project, SERAP, described the CBN’s directive as “grossly unlawful” and called on the president to immediately withdraw the directive.

The group further issued a 48-hour notice to the federal government to reverse the 0.5 percent cybersecurity levy imposed on electronic transactions or risk legal action.

SERAP Deputy Director, Kolawole Oluwadare, said, “The Tinubu administration must within 48 hours withdraw the patently arbitrary and unlawful CBN directive purportedly imposing cybersecurity levy on Nigerians.

“Section 44(8) criminalising the non-payment of the cybersecurity levy by Nigerians is grossly unlawful and unconstitutional.

“Our lawyer, Ebun-Olu Adegboruwa, is already preparing the necessary court papers, should the administration fail or neglect to act as recommended.

Oluwadare said, “The administration must urgently take concrete and effective measures to ensure the repeal of Section 44 and other repressive provisions of the Cybercrimes Act 2024.

“If the unlawful CBN directive is not withdrawn and appropriate steps are not taken to amend the repressive provisions of the Cybercrimes Act within 48 hours, SERAP shall consider appropriate legal actions to compel the Tinubu administration to comply with our request in the public interest."

 Cybersecurity levy: FG interested in milking a dying economy - Peter Obi

The Presidential candidate of the Labour Party, LP, in the 2023 general election, Peter Obi, also took to his official X page to express dissatisfaction over the federal government's introduction of the Cybersecurity levy. 

He wrote, "The introduction of yet another tax, in the form of Cybersecurity Levy, on Nigerians who are already suffering severe economic distress is further proof that the government is more interested in milking a dying economy instead of nurturing it to recovery and growth.

"This does not only amount to multiple taxation on banking transactions, which are already subject to various other taxes including stamp duties but negates the Government’s avowed commitment to reduce the number of taxes and streamline the tax system.

"The imposition of a Cybersecurity Levy on bank transactions is particularly sad given that the tax is on the trading capital of businesses and not on their profit hence will further erode whatever is left of their remaining capital, after the impact of the Naira devaluation and high inflation rate. It is inconceivable to expect the suffering citizens of Nigeria to separately fund all activities of the government. Policies such as this not only impoverish the citizens but make the country’s economic environment less competitive.

"At a time when the government should be reducing taxes to curb inflation, the government is instead introducing new taxes. And when did the office of the NSA become a revenue collecting centre?

"And why should that purely national security office receive returns on a specific tax as stated in the new cybersecurity law?"

 Cyber security levy is an unfair policy- Bank Customers Association

Speaking on the issue, the President of Bank Customers Association of Nigeria, Dr Uju Ogubunka, said that the move would adversely impact the cashless and financial inclusion drive of the apex bank.

He said, “I do not call it charge; I call it tax. It is another form of government tax. It can never be a welcome one because they did not give us any reason; there is no justification.

“If you want to do such a thing, you must provide your reason or justification. What about those who do not have accounts in the bank for instance? So, how do you get their portions? For me as an individual, I think it is unfair and that the government did not come with clean hands. I cannot remember anybody being consulted before this kind of policy.

“What they are trying to do is to set us backwards. We are talking about less cash in this economy and now you want to be charging customers for making transfers. If you do not want to be charged then you carry your cash. How are we helping this other policy, if we go this way? I think they need to rethink it and have wider consultations.”

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