Less than two weeks from today, Nigerians will witness the enforcement of cybersecurity levy on some electronic transactions in the country. The Central Bank of Nigeria (CBN) has ordered all commercial, merchant, non-interest and payment service banks to start charging the levy.
The implementation of the cybersecurity levy is in line with Section 44 (2)(a) of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 which provides that a levy of 0.005 per cent of all electronic transactions value by the business specified in the Second Schedule of the Act, be remitted to the National Cybersecurity Fund which will be administered by the Office of the National Security Adviser.
The cybersecurity Act “provides an effective, unified and comprehensive legal, regulatory and institutional framework for the prohibition, prevention, detection, prosecution and punishment of cybercrimes”
It also seeks to “ensures the protection of critical national information infrastructure, and promotes cybersecurity and the protection of computer systems and networks, electronic communications, data and computer programs, intellectual property and privacy rights” in Nigeria.
Essentially, the CBN’s new directive seeks to enforce the implementation of this piece of legislation which is aimed at coordinating cyber activities in the country.
According to the CBN, “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’.
Of course, in line with the Act, some transactions-salary payments, intra-account transfers within the same bank or between different banks for the same customer, intra-bank transfers, loan disbursements and repayments, among others-are exempted from the levy.
Wrong timing
Although this law predates the administration of President Bola Tinubu, many Nigerians who are bearing the brunt of the government’s harsh economic policies have likened it to yet another attempt to prevent the citizens from breathing.
Tellingly, for most Nigerians, the fact that the law was enacted under the Buhari presidency notwithstanding, the PBAT administration’s decision to implement it at a time like this when the citizens are battling serious economic hardship with their purchasing power eroded by inflation, is the height of insensitivity.
Few days into the current administration’s one year in office, it appears fixated on implementing unpopular policies, some of which have continued to erode whatever goodwill the government enjoys from the Nigerian masses.
In fairness to him, the president has, on different occasions, vowed that he was not afraid of taking difficult decisions even if such will make him unpopular. And it appears he is living to such an undertaking.
Specifically, I recall that in September last year, he told United Nations Secretary-General, António Guterres, that he was prepared to take tough decisions, even if such would make him unpopular.
And true to his words, PBAT has taken some unpopular decisions, most of which have continued to strain the already weakened purchasing powers of most Nigerians and throw them into untold hardship.
Yes, Nigerians are suffering and the least they expect of the government is to think of innovative ways of addressing their current plights. Rather than do that, the government is increasingly implementing policies that are compounding the citizens’ woes.
I won’t be tired of saying this. PBAT’s harsh policies and very unpopular decisions have continued to make life difficult for most Nigerians. Subsidy on petrol was removed. Electricity tariff has been hiked. Naira was devalued. Rates have been increased. And now we are bracing up for a new levy.
Of course, the latest directive to commence implementation of the cybersecurity levy is one of such unpopular decisions.
In line with the new levy, Nigerians will pay ₦5 on ₦1,000 transaction; ₦50 on ₦10,000; ₦500 on ₦100,000; ₦5,000 on ₦1,000,000; and ₦50,000 on ₦10,000,000
Needless to say, the latest addition is an expansion in the list of levies Nigerians have to pay for electronic transactions. Other ones being the stamp duty charge, SMS fee and Value Added Tax.
It is simple logic. The government needs to think of how best to achieve higher revenues without imposing taxes on the poor because doing that impedes economic growth.
Indisputably, there is the need to take yet another look at Nigeria’s fiscal policy. Rather than expand the list of taxes which have attendant consequences on income inequality, the government must make conscious efforts to close the income gap by prioritizing funding of social security, education, health, infrastructure development, among others.
Let the poor breathe
At the current pace, the government is toeing the path that will further impoverish the already poor citizens as their incomes will become lower when they pay more taxes.
Like the late George Floyd repeatedly told disgraced former police officer, Derek Chauvin, who knelt on his neck for nine minutes that ‘I can’t breathe’ before finally dying, Nigerians cannot breathe, even though they want to.
And although most poor Nigerians want to breathe now, more than ever before, a lot of things are pointing to the fact that there is a deliberate attempt to prevent them from breathing.
I am worried that it seems Nigerians will have to contend with a lot of challenges including inflation which remained obdurate even though the CBN increased rates twice this year in a bid to tame it, high unemployment, electricity tariff hike with an impending hike in telecommunications tariff, among others.
All of these have further exacerbated the current hardship.
It has been proven times without numbers that at every income level, countries can generate significant revenue collection while minimizing the impact on the poorest households.
Unfortunately, the Tinubu administration seemed too fascinated with taxing the citizens in the drive to boost revenue and has been bent on either introducing new taxes or aggressively implementing tax laws that were put on hold, some of them because his predecessors are convinced that not implementing them was the fitting thing to do at prevailing situations.
As for this cybersecurity levy, one particularly vexatious thing about it is the fact that the CBN didn’t even deem it fit to sensitise Nigerians ahead of implementation. People woke up and were greeted with a circular about a new levy they would be paying via electronic transactions. No. This ought not be so.
Indeed, the passion with which Nigerians both online and offline, have been condemning the new levy demonstrates clearly the need for the government to suspend its implementation because the timing is wrong. Expanding the tax base is not the right way to go now! The government should not tax us into poverty.