The Presidency announced on Wednesday that the cybersecurity levy was implemented to address the issues of cybercrimes and terrorism.

It was reported that the country suffered a loss of over N273 billion (approximately $762 million) to cybercrimes alone in 2022.

The statement also mentioned that similar levies are already in place in Ghana and Rwanda. However, opposition to the policy has grown, with the Trade Union Congress (TUC), former Labour Party (LP) presidential candidate Peter Obi, and the Coalition of Northern Groups (CNG) rejecting it.

According to a reliable source who spoke in confidence with our correspondent, the Federal Government is fully aware of the serious impact of cybercrimes on the nation's economy.

The source emphasized this in response to the growing criticism surrounding the inclusion of the Cybersecurity Fund in the Cybercrime Act 2024.

The source explained, "The primary purpose of the Cybercrime Act 2024 is to safeguard the nation's economy from potential collapse, rather than targeting the general population.

Those who are criticizing the Act may not fully understand the reasoning behind it. For instance, the Nigeria Inter-Bank Settlement System (NIBSS) reported that the Nigerian banking sector suffered a loss of over N273 billion (approximately $762 million) to cybercrime in 2022 alone."

“Apart from that, there have been SIM-swapping attacks on Nigerian banks since 2019 to date.

“Flutterwave, a leading African fintech company, has faced several allegations of security breaches in recent months amounting to millions of dollars in losses to customers.

“Even the Nigerian National Identity Management Commission (NIMC) has put adequate security in place to check incidents of data breaches.”

The source said the inherent benefits of the Cybercrime Act are contained in Section 44 of the Cybercrime Act.

He said Section 44 was designed for National Cyber Security Fund in which a levy of 0.005 of all electronic transactions b by some businesses to fight cybercrimes and terrorism.

The source added: “Contrary to insinuations, the Fund will be domiciled in the Central Bank within a period of 30 days.

“Also, an amount not exceeding 40 percent of the Fund may be allocated for programmes relating to countering violent extremism.

“The Federal Government is well-intended with the Cybercrime Act 2024. We live in a global village  in Africa, we cannot afford to ignore the reality of the threats of cybercrimes to our economic survival.

“The management of the Cyber Security Fund has enough checks and balances to prevent abuse. This government is determined to fight cybercrime.”

Section 44 of the Act reads: “(1) There is established the National Cyber Security Fund (in this Act referred to as “the Fund”).

“(2) There shall be paid and credited into the Fund established under subsection (1) of this section and domiciled in the Central Bank of Nigeria-

(a) a levy of 0.005 of all electronic transactions by the businesses specified in the Second Schedule to this Act;

(b) grants-in-aid and assistance from donor, bilateral and multilateral agencies;

(c) all other sums accruing to the Fund by way of gifts, endowments, bequest or other voluntary contributions by persons and organisations:

“Provided that the terms and conditions attached to such gifts, endowments bequest or contributions will not jeopardise the functions of the Council:

(d) such monies as may be appropriated for the Fund by the National Assembly; and

 (e) all other monies or assets that may, from time to time, accrue to the Fund.

“(3) All monies accruing to the Fund shall be exempted from income tax and all contributions to the Fund shall be tax deductible.

“(4) The levy imposed under subsection 2(a) shall be remitted directly by the affected businesses or organizations into the Fund domiciled in the Central Bank within a period of 30 days.

“(5) An amount not exceeding 40 percent of the Fund may be allocated for programs relating to countering violent extremism.

“(6) The Office of the National Security Adviser shall keep proper records of the accounts.

“(7) The Account of the Fund shall be audited in accordance with guidelines provided by the Auditor-General of the Federation.”

The TUC rejected the planned cybersecurity levy.

Its President, Comrade Festus Osifo, in a statement, urged the Federal Government to give a “marching order to the CBN to immediately withdraw the circular and cancel the planned levy forthwith.”

The statement reads: “It is indeed illogical that this is coming at a time that Nigerians are grappling with the high cost of living that is imposed by the devaluation of Naira, hyper hike in the cost of Petrol, supersonic increment in the cost of electricity tariff, etc. 

“Whereas a bank account holder in Nigeria today is currently charged stamp duty, transfer fee, VAT on transfer fee, and all forms of account maintenance levies by both government and the banks.

“So many policies of this government are not only imposing hardship on the downtrodden Nigerians but also on businesses, as some of them are shutting down because of the unfriendly business environment.

“The National Assembly that ought to be the bastion of democracy and the protector of the citizens oftentimes engages in collusion with elements within the executive to exploit the people. “

Obi faulted the levy, saying it was another form of taxation at a time when the government should be nurturing economic recovery and growth.

He said: “The introduction of yet another tax, in the form of Cybersecurity Levy, on Nigerians who are already suffering severe economic distress is further proof that the government is more interested in milking a dying economy instead of nurturing it to recovery and growth.

“This does not only amount to multiple taxation on banking transactions, which are already subject to various other taxes including stamp duties, but negates the government’s avowed commitment to reduce the number of taxes and streamline the tax system.

“The imposition of a Cybersecurity Levy on bank transactions is particularly sad given that the tax is on the trading capital of businesses and not on their profit hence will further erode whatever is left of their remaining capital, after the impact of the Naira devaluation high inflation rate.”

“It is inconceivable to expect the suffering citizens of Nigeria to separately fund all activities of the government.

“Policies such as this not only impoverish the citizens but make the country’s economic environment less competitive.

“At a time when the government should be reducing taxes to curb inflation, the government is instead introducing new taxes. And when did the office of the NSA become a revenue-collecting centre?

“And why should that purely national security office receive returns on a specific tax as stated in the new cybersecurity law?”

Also, the CNG, rejected the proposal, saying it was anti-masses and insensitive.

In a statement its National Coordinator, Jamilu Charanchi, CNG said: “This levy, which is expected to be effective within the next two weeks, exemplified the Federal Government’s lack of compassion and empathy to the plight of Nigerians in the face of the current economic hardship.

“It is crass heartlessness that is a sequel to fuel subsidy removal which now took fuel above N1000 per litre and the electricity tariff abruptly soaring.

“It is tantamount to another daily-light extortion in the offing by the government that came to be through democratic processes.”