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Tinubu Orders Review of Controversial Cybersecurity Levy, Urges CBN to Suspend Implementation

Written by Jerry Alomatu on May 12, 2024

News Views: 233

President Bola Tinubu has directed the Central Bank of Nigeria (CBN) to halt the implementation of the contentious cybersecurity levy and conduct a comprehensive review of the policy.

The decision came after the House of Representatives called on the CBN to rescind its directive instructing banks to impose a 0.5 per cent cybersecurity levy on all electronic transactions nationwide.

Issued on May 6, 2024, the CBN circular mandated banks, mobile money operators, and payment service providers to enforce the levy as stipulated in the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024.

Under the Act, a levy equivalent to 0.5 per cent of the value of all electronic transactions is to be collected and remitted to the National Cybersecurity Fund overseen by the Office of the National Security Adviser.

Financial institutions were instructed to apply the levy at the point of electronic transfer origination and ensure its explicit notation in customer accounts. Implementation was slated to commence on May 20, 2024, with remittances to be made to the NCF account domiciled at the CBN.

The circular also outlined a timeframe for financial institutions to adjust their systems to facilitate the timely submission of remittance files to the Nigeria Interbank Settlement Systems Plc.

Non-compliance with the directive would attract penalties, including a minimum fine of two per cent of annual turnover, as stipulated in the Act.

However, following discrepancies and concerns raised by stakeholders, including members of the House of Representatives, President Tinubu intervened, calling for a suspension of the levy’s implementation pending a review.

A presidency official disclosed that Tinubu’s directive stemmed from his commitment to alleviating the economic burden on Nigerians amidst ongoing economic reforms. The move aims to ensure that government policies do not exacerbate the financial challenges faced by citizens.

While Tinubu’s decision was lauded by some quarters, including the opposition People’s Democratic Party (PDP) and civil society groups like the Socio-Economic Rights and Accountability Project (SERAP), others, like the Nigeria Labour Congress (NLC), called for a complete reversal of the levy.

The NLC expressed concern that the levy, along with other taxes and levies, would deepen the financial strain on Nigerians already grappling with economic difficulties.

In response to SERAP’s threat of legal action, Tinubu’s administration has yet to provide a formal statement, but indications suggest a willingness to engage with stakeholders to address concerns and ensure a balanced approach to cybersecurity financing.