The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has asked the Federal Government and the Central Bank of Nigeria (CBN) to cap the maximum amount for the newly introduced cybersecurity levy at N500 to ameliorate the burden on the private sector.
The group recommended this in a statement seen by Nairametrics, where it raised concerns on the impact of the new levy on different aspects of the economy.
According to the association, with over N600 trillion recorded in e-payment last year, 0.5% of the figure yearly is significant and with the incident rate significantly lower than the levy rate, the proposed levy should be reduced to N500.
The group also called for clear performance metrics to justify the introduction of the additional tax on members of the private sector The statement read,
“With over 600 trillion naira (NIBSS 2023) in transactions annually, the projected revenue from this levy is considerable. For this reason, we must ask: what is the proportion of ALL online transactions are fraudulent transactions? In what way will this levy counteract such transactions? With incidence rates significantly lower than the levy rate, there is a mismatch that needs to be addressed. “We will therefore advise a maximum levy cap of Five Hundred (500) naira. It is also a fact that other methods exist to reduce local online cybersecurity risks through professional private sector experts.”
NACCIMA asked the Federal Government to involve the private sector in the management of the fund for transparency’s sake and stated that the new levy contravenes the provisions of the constitution on the federation’s revenue.
Effects of cybersecurity levy on private sector
Commenting on the effects of the levy on the private sector, the group said it conflicts with assurances of the Federal Government through the Presidential Committee on Fiscal Policy and Tax Reforms, which is on the verge of producing its final report that hopes to streamline the multiple taxes being borne by the private sector.
The statement also noted that the levy is inimical to Nigeria’s competitiveness in terms of ease of doing business and could catalyse capital flight and brain drain in the tech sector.
Recommended reading: Explainer: Is CBN’s cybersecurity levy 0.5% or 0.005%?
Backstory
The CBN recently ordered banks and other payment service providers to deduct 0.5% of the total value of electronic transactions as cybersecurity levies to be remitted to the cybersecurity fund domiciled in the office of the National Security Adviser (ONSA).
- The levy’s introduction has generated criticism from the public, especially private sector players. While there are some exemptions to the levy, many have claimed its introduction could stifle the cashless policy drive of the central bank.
- A statement by the Centre for the Promotion of Public Enterprise (CPPE) estimates that around N3 trillion of revenue is to be generated from the fund using the N600 trillion of electronic payment recorded in 2023.
