…say CBN’s circular gives wrong impression on who pays the levy
The House of Representatives on Thursday expressed strong opposition to the implementation of the cybersecurity levy introduced recently in compliance with the provisions of the Cybercrimes Act 2024.
This adds to the earlier objections raised by the Socio-Economic Rights and Accountability Project (SERAP), the Nigeria Labour Congress (NLC), as well as other groups and individuals.
The House of Representatives, after an extensive deliberation, on Thursday, May 9, 2024, directed the Central Bank of Nigeria (CBN) to immediately suspend the implementation of the levy.
Elaborating further on the Cybercrimes Act 2024, the House of Representatives said the institutions to pay the levy are GSM service providers and all telecommunication companies; internet service providers; banks and other financial institutions; insurance companies and the Nigerian Stock Exchange.
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 Cybercrimes Act which specify those who are expected to pay the levy.
It adopted the motion of urgent public importance moved by Minority Leader, Kingsley Chinda (PDP, Rivers) on behalf of the entire members, urging the CBN to immediately withdraw the earlier circular on the implementation of the levy and issue another circular in line with the provisions of the Act.
Chinda argued 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 as well as stock exchange.
He further explained that the circular from the CBN has raised apprehension across the country as it has given the impression that the levy is to be paid by Nigerians in an era when they are still battling with increase in price of petroleum products, among others.
Chinda 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 Cybercrimes (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.”
Following the announcement of the cybersecurity levy, pressure groups in the country such as the Socio-Economic Rights and Accountability Project (SERAP), Nigerian Labour Congress (NLC), among others, opposed the levy, saying it will add to the burden being faced by Nigerians currently.
Reacting to the announcement, SERAP, a non-profit and nonpartisan organisation, urged President Tinubu to order the CBN to reverse the cybersecurity levy within 48 hours, failure for which it threatens to take legal action against the Federal Government.
“The Tinubu administration must immediately withdraw the grossly unlawful CBN directive to implement section 44 of the Cybercrimes Act 2024, which imposes a 0.5% ‘cybersecurity levy’ on Nigerians. We’ll see in court if the directive is not withdrawn within 48 hours,” SERAP said.
On its part, the Nigerian Labour Congress warned the FG to discontinue with the levy saying that its implementation will further erode the disposable incomes of common citizens, according to a statement issued by Comrade Joe Ajaero, NLC President.
“While the CBN has exempted interbank transfers and loan transactions from this levy, the broader impact on everyday transactions cannot be overlooked. Such deductions directly affect the disposable income of workers and further diminish the purchasing power of the common citizens,” Comrade Ajaero said.
