Nigerians threaten showdown over new cybersecurity levy



…as NLC give ultimatum, it would worsen tax incidence, economic hardship – says OPS

There are concerns across board that the cybersecurity levy recently introduced by the Central Bank of Nigeria (CBN), will compound the burden of multiple taxes and severe economic hardship occasioned by the policies of the President Bola Tinubu administration.

Though it is understood that the president has ordered the CBN to halt its implementation in the interim.

The apex bank had, through a circular, directed all commercial, merchant, non-interest, and payment service banks, among others operating in the country to impose a cyber security levy of 0.5 percent on electronic banking transactions.

The circular dated May 6, 2024, revealed that it was a follow-up on an earlier letter dated June 25, 2018 (Ref: BPS/DIR/GEN/CIR/05/008) and October 5, 2018 (Ref: BSD/DIR/GEN/LAB/11/023), respectively, on compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015.

The CBN also said the levy is backed by the Cyber security Act 2024, which mandates banks to collect it on applicable transactions, and remit same to the Office of the National Security Adviser.

However, the CBN exempted loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and intra-bank transfers between customers of the same bank from the levy.

Also exempted from the levy were inter-branch transfers within a bank, cheque clearing and settlements, ⁠Letters of Credits, and Banks’ recapitalisation-related funding only bulk funds movement from collection accounts, savings, and deposits including transactions involving long-term investments, among others.

Nevertheless, many have pointed out that the introduction of cyber security levies, in addition to existing fees, such as stamp duty, transfer fees, value-added tax, ATM card maintenance and SMS charges has placed an unbearable financial burden on individuals engaging in electronic transactions.

This is widely seen as adding to the list of impositions arising from government’s desperation to shore up its finances without much concern about the impact on citizens and businesses.

The President’s removal of subsidy on premium motor spirit (PMS), through his inaugural address had plunged the country into turmoil, with petrol prices climbing by 350 percent.

This was followed two weeks later by the floating of the naira, which triggered an unprecedented devaluation that saw the currency depreciate from N460/$1 to N1,900/$ before recovering to trade around N1,440/$1 on Thursday, Business Hallmarks’s checks showed.

To address Nigeria’s perennial power shortages, Tinubu in April removed electricity subsidies to reflect commercial rates, such that the Band A customers now pay between N225 per kilowatt hour and N206.8KWh, up from N68KWh.

Many argue that the cyber security levy is at variance with Tinubu’s policy to eliminate multiple taxation. They call for the embracement of the report of the Presidential Committee on Fiscal Policy and Tax Reforms, which recommended the adoption of just nine taxes instead of the 62 identified to facilitate easy and voluntary compliance and administration.

Analysts say while it is normal that the government is seeking ways to raise funds, the cyber security levy is ill-timed and inappropriate, especially, when the inflation rate has topped 33 percent as of March, up from 22 percent a year ago, seriously eroding household incomes.

Wrong timing


Expectedly, prominent Nigerian groups of economic experts have moved against the policy, calling for the withdrawal of the circular in existence and issuing an unequivocal circular in line with the letters and spirit of the Cybercrimes (Amendment) Act, 2024.

In its reaction, the Lagos Chamber of Commerce and Industry (LCCI) condemned the move by the government to introduce a new levy at a time Nigerians were grappling with untold economic hardship.

In a statement signed by its Director-General, Chinyere Almona, the LCCI described the levy as worrisome, stating that individuals and businesses would be burdened with an additional levy amid unsettled performance crises with power supply after the recently reviewed electricity tariffs.

The chamber noted that the upward review of the electricity tariff had not resulted in a commensurate boost in power supply to justify the additional costs to individuals and businesses.

The LCCI further argued that since the collection of the levy cannot guarantee the protection of payers from cyber attacks, it was difficult to justify its collection at this time.

Similarly, the Centre for the Promotion of Private Enterprise (CPPE), demanded the stoppage of the cyber security levy, describing it as a major concern.

In a statement signed by its Chief Executive Officer, Dr. Muda Yusuf, CPPE said the levy was coming at a time when businesses and the generality of citizens were yet to recover from the shocks of current reforms.

Yusuf said, “Citizens and corporate organisations expect that taxes and levies are being rationalised and streamlined for a better business environment.

“The Presidential Committee on Fiscal and Tax Reforms had said this repeatedly. The announcement on the cyber security levy contradicts earlier assurances by the Presidential Committee.”.

Also, the Nigerian Economic Summit Group (NESG) urged the government to target high-net-worth individuals with the new cyber security levy, rather than imposing it on all electronic transactions.

In a statement on Thursday, NESG warned that the current plan to charge a 0.5 percent levy on all electronic transactions could lead to a boycott of digital payments, resulting in reduced revenue for the government.

It noted that the Presidential Committee on Fiscal Policy and Tax Reforms mandate includes the recommendation to reduce the amount of taxes, and the imposition of a cyber security fee could undermine this crucial directive.

The statement added that, notably, the programme aimed to combat cybercrimes and generate income for the government, but not at the expense of severely burdening Nigerians who are impoverished.

The statement read in part: “Amidst the cost-of-living crisis exacerbated by rising inflation, the cyber security levy is mistimed, considering CBN’s concern about the high rate of financial exclusion and increased currency in circulation.

“The cyber security levy needs to be reconsidered, considering the CBN’s concern about the high rate of financial exclusion and increased currency in circulation. At the NESG, we are concerned that implementing this policy at this critical time will decelerate the pace of achieving the 95 percent financial inclusion target of 2025.”

However, while the House of Representatives joined in condemning the policy and calling for its reversal, the Senate held that it was not meant to punish Nigerians as it has numerous exemptions to protect and relieve ordinary citizens, particularly the poor.


The resolution followed the adoption of a motion of urgent public importance moved by the House Minority Leader, Kingsley Chinda and 359 others.

“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,” Chinda, who represents the Obio/Akpor Federal Constituency, Rivers State, noted.

But the chairman of the Senate Committee on National Security and Intelligence, Senator Shehu Umar Buba, said the amendments to the Cybercrimes Act was a collaborative effort with the National Assembly’s ICT and Cyber Security Committee.

According to him, the committee also organised a transparent public hearing process, receiving contributions from various stakeholders, and both chambers of the National Assembly harmonised and adopted the law before President Bola Tinubu signed it into law.

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