At the level of the legislature, discordant tunes Thursday greeted the cyber security levy recently announced by the Central Bank of Nigeria (CBN) for bank’s electronic transactions.
While the Senate held that it’s not punitive as believed by critics of the new tax regime, the House of Representatives disagreed and asked the CBN to halt its implementation.
Individuals and groups, including labour unions, had at different times, voiced out their rejection of the new policy, saying it would further contribute to the current economic hardship faced by Nigerians.
…Senate’s position
But the Senate, through its committee on National Security and Intelligence, threw its weight behind the levy, saying it is provided for in the Cybercrimes (Prohibition, Prevention, etc) (Amendment) Act, 2024 passed by the National Assembly and assented to by President Bola Ahmed Tinubu.
The committee, in a statement by its chairman, Senator Shehu Umar Buba (APC Bauchi South), clarified that the levy is not punitive as it has numerous exemptions to protect and relieve ordinary citizens, particularly the poor.
According to him, the exemptions include salary payments, intra-account transfers, loan disbursements and repayments, and other financial transactions.
Buba said the amendments to the Cybercrimes Act were a collaborative effort with the National Assembly’s ICT and Cyber Security Committee.
The committee he added , also underwent a transparent public hearing process, receiving contributions from various stakeholders before both chambers of the National Assembly unanimously passed it and eventually assented to by President Tinubu.
He emphasised that the provisions for the cybersecurity levy had been in place since 2015 but delayed due to unclear interpretations and applications.
“The Cybercrimes Act of 2015 has provisions for imposing a cybersecurity levy since its enactment, but the vagueness of Section 44 led to different interpretations until the 2024 amendments. The levy is 0.5%, equivalent to half a per cent of the value of all electronic transactions by businesses specified in the Second Schedule to the Act.
“The amendments addressed crucial gaps in the Act and empowered the nation to implement the National Cybersecurity Programme effectively. They also seek to realign and empower the country to combat the inadequate funding and disruptive effects of cyber threats on national security and critical economic infrastructures,” he said.
The committee underscored the criticality of the cybersecurity levy’s implementation, stating that “its prudent utilisation will bolster the nation’s capacity to evaluate, execute, upgrade, and fortify the security of national critical economic infrastructure, thereby safeguarding the nation’s cyberspace.
“The Committee commended the Office of the National Security Adviser and the Central Bank of Nigeria (CBN) for initiating the operationalising the cybersecurity levy, highlighting its benefits far outweigh its drawbacks,” he said.
While maintaining that the committee’s mandate is to create laws that align with the aspirations of Nigerians, he appealed for public support, assuring that the policy would yield maximum benefits for citizens in the shortest possible time.
Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024 and under the provision of Section 44 (2)(a) of the Act, a levy of 0.5 per cent (0.005) equivalent to half per cent of all electronic transactions value by the business specified in the Second Schedule of the Act is to be remitted to the National Cybersecurity Fund, which the Office of the National Security Adviser shall administer.
…Exemptions
Though the announcement created controversy, the circular exempted some transactions from cybercrime levy.
The exemptions included loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, intra-bank transfers between customers of the same bank, and Other Financial Institutions (OFIs) instructions to their correspondent banks.
The exemption also applies to interbank placements, banks’ transfers to CBN and vice versa, inter-branch transfers within a bank, cheque clearing and settlements, and Letters of Credit (LCs).
Others include banks’ recapitalisation-related funding only bulk funds movement from collection accounts; savings and deposits including transactions involving long-term investments such as treasury bills, bonds; and commercial papers; government social welfare programmes transactions, e.g. pension payments; non-profit and charitable transactions including donations to registered non-profit organisations or charities; educational institutions transactions, including tuition payments and other transaction involving schools, universities, or other academic institutions.
…Reps reject policy
Notwithstanding the Senate’s position, the House directed the CBN to put on hold the implementation of the cybercrime levy.
The House said the circular by the apex bank was prone to misinterpretation by Nigerians as it negates the spirit and letters of section 44(2a) of the cybercrime Act which specify those expected to pay the levy.
Adopting a motion of urgent public importance moved by Minority Leader, Kingsley Chinda (PDP, Rivers), on behalf of the entire members, the Green Chamber asked the apex bank to immediately withdraw its earlier circular on the implementation of the levy and issue another circular in line with the provisions of the Act.
The lawmaker stated that Section 44(2a) of the cybercrime act listed those to pay the stipulated fees as GSM and telecom companies, Internet providers, Banks and other financial institutions, insurance companies and Stocks Exchange.
According to him, the circular from the CBN had caused apprehension across the country as it has given the impression that the levy is to be paid by Nigerians in an era they are still battling with increase in price of petroleum product among others.
He said: “The Central Bank of Nigeria, through a Circular to all Commercial, Merchant, Non-interest and Payment Service Banks, other Financial Institutions, Mobile Money Operators and Payment Service Providers dated 6th May, 2024 informed Nigerians of a proposed 0.5% levy on electronic transactions in line with Section 44(2)(a) of the Cybercrnmes (Prohibition, Prevention, etc.) (Amendment) Act, 2024 (‘Cybercrimes Act’).
“Section 44(2)(a) of the Cybercrimes (Prohibition, Prevention, etc.) (Amendment) Act, 2024 provides that “a levy of 0.5% (0.005) equivalent to half percent of all electronic transactions value by business specified in the Second Schedule to this Act” be paid into the Cybersecurity Fund.
“The 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 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 CBN 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.
“This act has led to apprehension as civil society organisations and citizens have taken to conventional and social Media to call out the federal government, give ultimatums for a reversal of the “imposed levy on Nigerians’ among other things.
“Unless immediate steps are taken to halt the proposed action 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,” the House said.
NEF kicks
Similarly, the Northern Elders Forum (NEF) has kicked against the new levy.
A statement Thursday by NEF spokesman, Abdul-Azeez Suleiman, quoted the group as expressing dissatisfaction with the policy, citing the escalating costs associated with banking transactions as a result of multiple charges.
While describing directive as arbitrary, illegal, and out of touch with the current realities faced by Nigerians, NEF called on the federal government to reconsider the policy and explore alternative measures to ease the financial strain on individuals.
The NEF contended that the introduction of the policy, coupled with existing fees such as stamp duty, transfer fees, value-added tax, and SMS charges, would place added financial burden on individuals using electronic transactions.
“The introduction of cybersecurity levies, in addition to existing fees such as stamp duty, transfer fees, value-added tax, and SMS charges, has placed an unbearable financial burden on individuals engaging in electronic transactions,” the statement reads.
“The various charges that bank customers now face, including cybersecurity levies ranging from N5 on N1,000 to N50,000 on N10,000,000 transactions, transfer fees, stamp duty, and value-added tax,” they said.
The NEF further stated that “it is imperative that the administration takes into account the concerns raised by a vast majority of Nigerians and prioritises policies that protect the interests of the people while also fostering economic growth and development.”
“It is crucial that the government listens to the concerns of organisations like the NEF and work towards implementing policies that benefit all Nigerians, rather than burdening them with additional costs and hardships.
“It is essential to strike a delicate balance between enhancing cybersecurity and easing the financial burden on the populace, particularly when the Nigerian economy is facing significant challenges due to inflation and other economic factors,” Suleiman said.
“These additional costs have significantly increased the overall expense of electronic transactions for both senders and receivers. While acknowledging the importance of cybersecurity in safeguarding electronic transactions,” the statement further agued.
