Recently, President Bola Ahmed Tinubu directed the suspension of the recently introduced cybersecurity levy. This came just a week after the Central Bank of Nigeria (CBN) directed banks to implement a levy of 0.5 percent (0.005) and to remit the same to the ‘national cybersecurity fund.’ Apparently, it was in accordance with the Cybercrime Act.
According to the circular released by CBN “Following the enactment of the Cybercrime (Prohibition, Prevention, etc.) (Amendment) Act 2024 and pursuant to the provision of Section 44 (2)(a) of the Act, ‘a levy of 0.5 percent (0.005) equivalent to a half percent of all electronic transactions valued by the business specified in the Second Schedule of the Act,’ is to be remitted to the National Cybersecurity Fund, which shall be administered by the Office of the National Security Adviser.”
Read also: A review of the CBN circular on cybersecurity levy- A business intelligence perspective
However, as soon as the circular was released, there was a public outcry! Even in the hallowed chambers of the National Assembly, there were debates over the policy, with the Senate being mostly in support while the House of Assembly demanded that CBN suspend the implementation.
The outcry regarding this particular guideline was so loud that the Socio-Economic Rights and Accountability Project (SERAP), BudgIT, and some concerned Nigerians filed a lawsuit against CBN over the cybersecurity levy, citing Funda and stating that such deductions would be unlawful and a breach of sections 14(2), 44(1), and 162(1) of the Nigerian Constitution 1999 (as amended), and therefore unconstitutional, null, and void.
Once again, we see that the policy was rolled out without a proper analysis. With the current economic hardship being faced by most Nigerians, indeed, the implementation of yet another “tax” was ill-timed.
While taxes and levies are necessary in any economy, as noted by Dr. Ngozi Okonjo-Iweala, they are to be streamlined and not place any undue hardship on the populace. Furthermore, as noted by many, no country has ever taxed its way to prosperity.
There is also an urgent need to properly interpret the provisions of the Act, as there seems to be some confusion. For instance, the Chairman of the Senate Committee on National Security and Intelligence, Senator Shehu Buba, stated that the cybersecurity levy was not targeted at individuals operating bank accounts but at telecom companies and financial institutions.
Read also: 56% of central banks lack national cybersecurity strategy — IMF
While this suspension means that the levy may be re-introduced in some form, it is hoped that more work will be done behind the scenes to ensure that the needful is done before any such policy comes into play.
Government agencies and the National Assembly should ensure that every proposed guideline, levy, or policy goes through appraisal and pre-assessment to ensure that they are not only fit for purpose but that the countervailing risks are at a bare minimum. Proper analysis by policy experts before the design stage is imperative to ensure proper design and timing.
In the meantime, the pause by the president is a welcome development.
Chioma Momah is a public policy lawyer, author and a parenting & family life advocate
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
