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The Nigerian government's recent introduction of a 0.5% Cybersecurity Levy on electronic transactions has ignited a nationwide debate.
The Central Bank of Nigeria (CBN), in a circular to banks on Monday, 6th of May, 2024 announced the levy on all electronic transactions.
CBN in the circular said, “Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024 and pursuant to the provision of Section 44 (2)(a) of the Act, a levy of 0.5% (0.005) equivalent to a half per cent of all electronic transactions value by the business specified in the Second Schedule of the Act, is to be remitted to the National Cybersecurity Fund (NCF), which shall be administered by the Office of the National Security Adviser (ONSA).”
“Accordingly, all Banks, Other Financial Institutions and Payments Service Providers are hereby required to implement the above provision of the Act as follows:”
“Calculate the levy based on the total 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’.”
According to the CBN, this new levy aims to bolster Nigeria's digital defences by funding the National Cybersecurity Fund. The government maintains that increased cybersecurity is crucial to protect financial transactions and critical infrastructure against cyber threats.
A statistic agency, Statisense, in an explainer post titled; 'Cost of Electronic Transactions' on its official X account, expounding on the cybersecurity levy said;
CYBERSECURITY LEVY: SENDERS now bear;
₦5 on ₦1,000
₦50 on ₦10,000
₦500 on ₦100,000
₦5,000 on ₦1,000,000
₦50,000 on ₦10,000,000
STAMP DUTY: RECEIVERS bear....
₦50 on ₦10,000
₦50 on ₦100,000
₦50 on ₦1,000,000
₦50 on ₦10,000,000
TRANSFER FEES: SENDERS bear...
₦10 on ≤₦5,000
₦25 on ₦5,001 — ₦50,000
₦50 on >₦50,000
VALUE ADDED TAX: SENDERS bear...
₦0.75 on ₦10 Transfer fee
₦1.875 on ₦25 Transfer fee
₦3.75 on ₦50 Transfer fee
SMS FEE: SENDERS & RECEIVERS bear...
₦4 on each electronic transfer notification
All applicable on eligible electronic transactions
This new levy has been met with several backlash from Nigerians, who argued that the levy came at the wrong time when the citizens are still battling an increase in fuel pump prices and a hike in electricity tariff.
Among many questions that Nigerians are asking is the question; which country pays the Cybersecurity levy?
Checks by RocketParrot showed that the United States of America pay Cybersecurity levies through the government budget via agencies like CISA. Like the U.S.A., the United Kingdom which also pays cybersecurity levies does not directly tax their citizens while Israel uses government investment and public-private partnerships and leverages its strong cybersecurity industry.
Reacting to this new levy by the government, Nigerians have taken to the popular micro-blogging site, X (formerly Twitter) to express their disagreement;
Labour Party Presidential Candidate, Peter Obi, via his official X account, kicked against the levy, saying;
"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".
Giving the government other options, CEO of Maxut Consulting Ltd, Michael Odusami, during an interview with Arise TV, said; "Government Should Fund Cybersecurity Instead of Imposing Additional Levy
"Allowing only two weeks for organizations to comply is too short. The National Assembly should revise this approach, as ideally, the government should finance it through existing taxes or other means."
An Elder Statesman and Dean of Borno Elders Forum, Prof. Khalifa Dikwa, defending the President's action said his administration was blackmailed into approving the cybersecurity levy policy initiated by the Central Bank of Nigeria, CBN.
Introduction of new taxes will only worsen the hardship Nigerians are currently facing- Babajide Kolade Otitoju, a security expert also disagrees with FG's introduction of the cybersecurity levy
However, contrary to the the dissenting voices about the cybersecurity levy, a security expert, Hon. Aliyu Gebi while on Channels TV Politics Tonight argued that the initiative is a good step in the right direction.
He opined, "We have won the war (in the North East) but we cannot win the peace when tens and hundreds of billions of naira disappear overnight."
"The porosity of our cyberspace can't be comprehended because we assume we are secure, if Nigerian banks were to open up to how much money they have been losing through cybercrime, perhaps everyone will run to take their money because our money is not safe",
A Peoples Democratic Party Stalwart, Reno Omkri, also supporting the motion in a series of tweets, said;
"This Cybersecurity Levy is not a policy or regulation of the Tinubu administration. Those bandying that claim are either ignorant or dishonest. This is a policy that has existed since 2015. Like many things in the Buhari administration, it was implemented in breach, which is why Cyber Security suffered under that unfortunate administration.
"The reason why Binance was able to siphon $25 billion, which represents 6% of our GDP, out of Nigeria in just one year is because our cybersecurity architecture is porous. And as long as it is vulnerable, the Naira cannot be stable. And if the Naira is not stable, your purchasing power as a Nigerian will reduce DRASTICALLY.
"Therefore, it is more profitable for you to pay a 0.5% cybersecurity levy and secure the Naira from all threats, foreign and domestic, than for you to resist the policy, and the Naira goes into free fall.
"Not all monetary transactions are affected.
"Social welfare schemes, such as the grant to nano entrepreneurs and any other social intervention program, are exempt, as are charitable donations, and tuition payments.
"Salaries, loans and their repayments, transfers between customers, and intra-bank transfers from one of your accounts to another account you have in a different bank are also exempt.
"If the office of the National Security Adviser does not have a solid and dedicated team working to protect Nigeria's military, industrial, financial, communications, educational and governmental online space from threats, the cost to you, personally, would be more than the 0.5% levy on your transactions, and I will give you an example.
"If Binance had not been found out, and they had continued to funnel $25 billion out of Nigeria, that singular action would have meant that our Gross Domestic Product (the sum of all the wealth in Nigeria) would have dropped further by 6.5%.
"Now, If Nigeria's GDP tanks by 6.5% at a go, global rating agencies like Fitch, Moody's, Standard and Poor, and others that have recently upgraded our economy to a B Positive, would downgrade us. Once we get downgraded, international investors will not want to invest their money in Nigeria, and the demand for made-in-Nigital goods and services will fall, meaning that the exchange rate will go down.
"Remember MMM? The reason the Mavrodian Mondial Moneybox were able to dupe hundreds of thousands of Nigerians of close to half a billion dollars is because of our weak cybersecurity system.
"And these international carpetbaggers can smell such weakness the way sharks smell blood. When you are bleeding, a predator does not feel sympathy towards you. They see your rupture as an opportunity.
"That is why after MMM duped Nigerians, other Ponzi schemes flooded Nigeria and amassed more daily regular traffic than the best-read newspapers in Nigeria, including Ultimate Cycler, Zarfund, Givers Forum, Crowd Rising, iCharity, to mention a few. They all came, they saw, and they duped Nigerians.
"When the cat's away, the mice will play. Without adequate cybersecurity in Nigeria, opportunists, like Binance and MMM, would continue to fleece Nigeria and Nigeria off billions and put negative pressure on our Naira, which will reduce your purchasing power as a citizen.
"There are arguments this levy would reduce financial inclusion. But in all honesty, people are more likely to bank their money if they know that Nigeruw's cyberspace is safe from cybercriminals and the Dark Web than if they feel that our regulatory regimes are weak.
"Politicians like Peter Obi, whom the International Consortium of Investigative Journalists fingered for money laundering in their Pandora Papers, would be against such a laudable policy. But that is expected. The fly would always support the dustbin and its ability to cause the decay of life, over the refrigerator."
However, Nigerians in dissenting voices, took to their social media to condemn the levy;
Jeey Williams, a Graphics Designer, @WilliamsJJerry said, The cybersecurity levy on already taxed & impoverished Nigeria is INSENSITIVE, evil and injurious to Nigerians.
The same @cenbank introduced a cashless policy a few years ago, now the same CBN is bringing this levy to defeat the cashless policy. This policy is ANTI-PEOPLE! END IT NOW!!
Name cannot be blank @hackSultan said, "Sleep ooo, when you wake up, you’ll see the news.
Here’s the new reality.
1. Your electronic transactions now carry a 0.5% “cybersecurity levy”
2. For individuals, cash deposits at the bank above 500k now attract a 2% processing fee.
3. For companies, you now pay a 3% processing fee on cash deposits of 3M and above.
All the other normal charges you’re used to are still active ooo. Some of these laws are not new, they’re just recently being enforced."
Omotayo of Lagos @Tee_Classiquem1 said, "While we are still trying to digest the Cybersecurity levy, the late news is that POS operators are now under obligation by the govt to register under CAC or they will be restricted from operating, Tinubu will use tax to finish the life of Nigerians before his tenure expires".
Ocular Priest @Drbiefule said, On the Cybersecurity Levy, Bola Tinubu did warn y’all that he would tax you, reduce your purchasing power, and slow down the economy, but you didn't understand cos you were carried away by the Muslim Muslim ticket and a desire to teach Peter Obi a lesson.
#OurFavOnlineDoc @OurFavOnlineDoc said, "Incoming telecom tax.
0.5% cybersecurity levy on transfers.
Stamp duty on mortgage facilities.
Stamp duty on transactions above N500,000.
Even Pharaoh no do reach like this."
The Federal Government under the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024 and under the provision of Section 44 (2)(a) of the Act have the right through the Central Bank of Nigeria to enact Cybersecurity levy, the questions are should Nigerians pay for it?
Let us know what you think in the comment section.
