Suspend implementation of cybersecurity levy, Tinubu orders CBN

President Bola Tinubu has asked the Central Bank of Nigeria to suspend the implementation of the controversial cybersecurity levy policy and ordered a review.

This followed the decision of the House of Representatives, which, last Thursday, asked the CBN to withdraw its circular directing all banks to commence charging a 0.5 per cent cybersecurity levy on all electronic transactions in the country.

The CBN on May 6, 2024, issued a circular mandating all banks, mobile money operators, and payment service providers to implement a new cybersecurity levy, following the provisions laid out in the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024.

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

Financial institutions are required to apply the levy at the point of electronic transfer origination.

The deducted amount is to be explicitly noted in customer accounts under the descriptor “Cybersecurity Levy” and remitted by the financial institution. All financial institutions are required to start implementing the levy within two weeks from the issuance of the circular.

By implication, the deduction of the levy by financial institutions should commence on May 20, 2024.

However, financial institutions are to make their remittances in bulk to the NCF account domiciled at the CBN by the fifth business day of every subsequent month.

The circular also stipulates a timeframe for financial institutions to reconfigure their systems to ensure complete and timely submission of remittance files to the Nigeria Interbank Settlement Systems  Plc as follows: “Commercial, Merchant, Non-Interest, and Payment Service Banks – Within four weeks of the issuance of the Circular.

“All other Financial Institutions (Microfinance Banks, Primary Mortgage Banks, Development Financial Institutions) – Within eight weeks of the issuance of the Circular,” the circular noted.

The CBN has emphasised strict adherence to this mandate, warning that any financial institution that fails to comply with the provisions will face severe penalties. As outlined in the Act, non-compliant entities are subject to a minimum fine of two per cent of their annual turnover upon conviction.

The circular provides a list of transactions currently deemed eligible for exemption, to avoid multiple applications of the levy.

These are loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and intra-bank transfers between customers of the same bank.

Exemptions include other financial institutions’ transfers to their correspondent banks, interbank placements, banks’ transfers to CBN and vice versa, inter-branch transfers within a bank, cheque clearing and settlements, letters of credit, and banks’ recapitalisation-related funding.

“You know he (Tinubu) was not around when that directive was being circulated. And he does not want to present his government as being insensitive. As it is now, the CBN has held off the instruction to banks to start charging people. So, the President is sensitive. His goal is not to just tax Nigerians like that. That is not his intention. So, he has ordered a review of that law.”

Tax reforms not to frustrate Nigerians — Shettima

Meanwhile, the Vice President, Kashim Shettima, on Saturday, said the tax reforms undertaken by the Bola Tinubu administration were not aimed to frustrate Nigerians but to sustain the country’s investment friendliness.

The VP, represented by his Special Adviser on General Duties Dr Aliyu Umar, spoke at the close-out retreat of the Presidential Fiscal Policy and Tax Reforms Committee held at the Transcorp Hilton, Abuja. Shettima’s Spokesperson, Mr Stanley Nkwocha, revealed this in a statement titled, ‘Our tax reforms initiated for overall benefits of Nigerians – VP Shettima’.

He argued that contrary to speculations in some quarters, “we are not here to frustrate any sector of our economy but to create an administrative system that ensures the benefits of a thriving tax system for all our citizens”.

Levy suspension welcome development – PDP

Reacting to the decision of the President, the Peoples Democratic Party’s National Publicity Secretary, Debo Ologunagba, welcomed the suspension of the cybersecurity levy policy implementation, noting that the policy should not have been introduced at all.

He said, “It was an anti-people decision from the beginning. It was an insensitive decision from the beginning. It was an ambush on the people who had already been frustrated by the multiple layers of taxes from the beginning. So, it was a very cruel introduction because you do not need to tax us to have cybersecurity.

“You do not need to tax the villagers or the people in the rural areas for cybersecurity. People who do not even have light. They don’t even have access to an internet connection. Well, if that is a show that the president is listening, then that is good. Then, he must now continue to listen more and begin to look at where the problem started and that is the issue of removal of subsidy without any cushioning of its effect. What will happen is that the president should go back further so that Nigerians can breathe by ensuring a policy that will reduce the hardship of the sudden removal of the subsidy.”

Also, reacting to the development, the Chief Executive Officer, Centre for Promotion of Private Enterprises, Dr Muda Yusuf, said the President’s decision shows he is a democrat, adding that the CBN should ensure that the reviewing process of the policy is very inclusive.

“The President’s decision is in line with the clamour by the people. There had been a lot of outcry about it and the fact that the president has responded shows that he is a democrat. It shows he is a listening leader. So we must commend him for listening to the voices of the people. It is a welcome development.

“The government should now look at the policy. I am sure it is not going to be only the CBN. Even the legislators should also look at it because they passed the law. But the key thing is that the policy needs to be reviewed. And the apex bank should take the review beyond the government level. It must consult the stakeholders and the organised private sectors. That is what will make the review very inclusive.”

Also speaking to Sunday PUNCH, the Director of Centre for Anti-corruption and Open Leadership, Debo Adeniran, said while President Tinubu should be commended for the decision, the Federal Government should consider a total cancellation of the policy instead of a temporary suspension.

He said, “This is the right step in the right direction. It further accentuates the fact that President Tinubu listens to the voice of the people. And maybe it is because he used to be an activist. He knows that the voice of the people is the voice of God.

A statement signed by the NLC President, Joe Ajaero, demanded the reversal of the directive by CBN, adding that the Federal Government should prioritise policies that alleviate the financial burdens of Nigerians. NLC said the move, which was ostensibly aimed at bolstering cybersecurity measures, could exacerbate the financial strain already faced by the populace.

 

Additional reports: Stephen Angbulu, Godfrey George, Imoleayo Oyedeyi, Ayoola Olasupo, and Daniel Ayantoye