The Central Bank of Nigeria (CBN) added to the worries of many Nigerians on May 6th when it issued a circular directing banks to put structures in place for the implementation of the cybersecurity levy.
The circular, with reference number PSM/DIR/PUB/LAB/017/004 addressed to all commercial merchants, non-interest and payment service banks, other financial institutions, mobile money operators, and payment service providers, was titled: Re-Cybercrimes (Prohibition, Prevention, etc., Amendment Act 2024): Implementation Guidance On The Collection And Remittance Of The Cybersecurity Levy. It was signed by two of its directors, Chibuzo Efeobi, Director, Payment System Management Department, and Haruna Mustapha, Director, Financial Policy and Regulation Department.
In the circular, the apex bank directed banks and other financial institutions to start deducting a 0.005 percent cybersecurity levy on all electronic banking transactions and to start the collection within two weeks of the date the circular was issued and remit the same to the NCF account domiciled in the apex bank. The fund, we were told, would be administered by the Office of the National Security Adviser (ONSA). Again, the Central Bank, in the circular, listed 16 exceptions to the new directive.
Ordinarily, that CBN circular should not have been written in the first place if due diligence had been carried out by the Apex Bank. I doubt if the circular passed through CBN’s legal department as its content doesn’t appear in the usual style and letters of the 2024 Cybersecurity Act passed by the National Assembly on February 27 this year and which was given express approval by President Bola Tinubu 24 hours later.
There are several ambiguities in the circular. In one breath, the circular stated that 0.5 percent is what banks should deduct from all electronic bank transfers, but the 2024 Cybersecurity Act passed by the National Assembly and signed into law by the President stipulates a 0.005 percent deduction. Which of the two figures should the banks work with?
Again, the Cybersecurity Act signed into law does not mandate Nigerians to pay any cybersecurity levy, but it is specific to businesses that are to pay the levy. These ambiguities have been pointed out to the Apex Bank by members of the House of Representatives as well as the Lagos-based Senior Advocate of Nigeria, Femi Falana (SAN).
The Minority Leader of the House of Representatives, Kingsley Chinda (PDP Rivers), and 359 others, in a motion on the floor of the House last week, directed the CBN to suspend the implementation of the levy until the CBN gets its act right, as they noted that the levy was meant to be paid by businesses specified in the second schedule of the Act and not by all Nigerians.
Indeed, Section 44(2)(a) of the Cybercrimes (Prohibition, Presentation, etc) Amendment Act 2024 provides that a levy of 0.005 of all electronic transactions by businesses specified in the second schedule of the Act be paid into the Cybersecurity Fund. In fact, the businesses that the said section 44(2)(a) refers to are listed as follows: a) GSM service providers and all telecommunication companies; b) Internet service providers; c) banks and other financial institutions; d) insurance companies; and e) Nigerian Stock Exchange.
The lawmakers expressed concern that the CBN circular mandates all Banks, Other Financial Institutions and Payment Service Providers to implement the Cybercrimes Act by applying the levy at the point of electronic transfer origination as Cybersecurity levy and remitting the same.
The lawmakers did not stop at that but further stated that the wording of the CBN circular leaves the CBN directive to multiple interpretations, and that asking bank customers to start paying the levy is against the spirit and letters of Section 44(2)(a) and the Second Schedule to the Cybercrimes Act.
Chinda argued that unless immediate pragmatic 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 removals of subsidies from petroleum, electricity, and so on, as well as rising inflation.
In the same vein, Falana (SAN) wants an apology from the CBN for its misleading interpretation of the clear and unambiguous provisions of the Cybercrime (Prohibition, Prevention, etc.) Amendment Act 2024. The senior lawyer said that although the said levy is payable by the businesses listed in the second schedule to the Principal Act, the CBN wrongly directed all financial institutions to apply the levy at the point of electronic transfer origination.
“The erroneous interpretation might have arisen from the substitution of ‘businesses’ for ‘business’ in the amendment. For the avoidance of doubt, by virtue of Section 42(a) of the Cybercrime Act 2024 as amended, the businesses that are required to pay the levy are GSM service providers and all telecommunications companies; internet service providers; banks and other financial institutions; insurance companies; and the Nigerian Stock Exchange”, Falana said.
In a country where the majority of the people now find it hard to eat and are faced with multiple taxes, our leaders should not be thinking of adding to the misery of the people. Since assuming office, the Tinubu administration has imposed tough economic policies on the people, which has pushed many to lose hope of a better tomorrow.
From his inauguration day’s “fuel policy is gone” rhetoric to the unification of the exchange rate of the Naira which has brought about hyperinflation, a significant number of Nigerians have been pushed into abject poverty. Many can no longer afford to feed themselves and their families due to the high cost of foodstuffs and other essentials. The price of fuel has tripled since its inauguration on May 29 last year, when the present government came to power.
The cost of transportation has risen astronomically while the minimum wage still remains a meagre N30,000, even though the federal government has set up a tripartite committee that is presently negotiating with labour leaders on a new minimum wage. This is therefore not the time for the government to start considering adding to the woes of the masses. Any other form of taxation at this critical time on the already impoverished masses would signal a game over. People are already tired of the precarious situation we are in in Nigeria.
The Tinubu government should rather put in place measures that would alleviate the sufferings of the people. Just last month, the tariff on electricity was raised by more than 300 percent for consumers in Band A, who are said to be enjoying their electricity supply for up to 20 hours a day.
Even at that, a few days ago, the government was forced to reduce the tariff from N225/per kilowatt of electricity to N206.80, as the policy was very unpopular and outrightly condemned by many. The Nigerian Labour Congress (NLC) and its sister organization, the Trade Union Congress (TUC), are still bent on picketing the offices of Discos and Gencos as well as transmission companies any moment from now.
A year ago, President Tinubu promised Nigerians renewed hope. He promised to improve the lot of Nigerians. In the last year, that renewed hope has gradually become renewed shege (hopelessness) and suffering. While he may have said that he would take tough decisions and that soon, there would be light at the end of the tunnel, that tunnel seems never ending, taking most people farther away from hope and prosperity.
Since he specifically established a committee headed by Taiwo Oyedele known as the Presidential Fiscal Policy and Tax Reforms Committee, with the job specification of harmonizing tax payments in the country, Oyedele has, on several occasions, argued that we do not need many taxes to collect much revenue. In fact, the contrary holds true. He was also surprised when the CBN came up with the circular on the implementation of the cybersecurity levy, as it ran counter to the mandate of his committee.
Apart from that, coming at a time when the country is starting to benefit from the implementation of the cashless policy, the CBN circular, if retained, has the potential of driving Nigerians away from the banking halls, as many would simply prefer keeping their little funds under their pillows at home. Even before the introduction of the Cybersecurity levy, many Nigerians had fallen victim to criminals using the digital space as their workshop to defraud unsuspecting Nigerians. Just few days ago, a prominent Nollywood actress was on social media to complain that her entire life’s savings were wiped off by fraudsters who cleared out all her money from her Zenith Bank account.
Although she succeeded in retrieving the money with the assistance of Nigerians and her bank, I doubt if she would be comfortable keeping money in the bank again, as it could be lost within a twinkle of an eye.
Already, Nigerians have been subjected to a series of taxes for the simple reason of keeping money in the bank. There is the Stamp Duty levy, Transfer fee levy, Value Added Tax levy paid on most transactions, as well as SMS charges and Maintenance fees on ATM cards. Any other form of taxation that would yield funds for the government for its sundry activities would be an overkill. Is the CBN now telling Nigerians that once we start paying the Cybersecurity levy, fraudsters won’t have easy access to our funds again, and can they assure us that once our money is missing, they will get the fraudsters? And if not, would they ensure a refund?
While individuals are susceptible to the antics of fraudsters, even institutions are not left out. In 2023 alone, the Nigeria Inter-Bank Settlement System (NIBSS) said that financial institutions lost about N17.67 billion to fraud. Thus, the implementation of the cybersecurity levy is believed to be a proactive measure to safeguard against these threats and protect the integrity of Nigeria’s digital economy. But should it be at the expense of already traumatized Nigerians? Would the office of the National Security Adviser be willing to open its books for scrutiny and not hide under the nebulous security funds that cannot be audited and queried? Is the NSA’s office now a revenue generating office? The CBN dropped the ball with that circular, and it would do that institution a whole lot of good if it were withdrawn and an apology tendered to Nigerians with immediate effect. President Tinubu, however, came to the rescue of Nigerians when he directed the suspension of the implementation of the cybersecurity levy. He is proving to be a good listener.
See you next week!
