The Nigerian Economic Summit Group (NESG) has voiced concerns about the timing of the Central Bank of Nigeria’s (CBN) recently introduced 0.5% cybersecurity levy on electronic transactions. The levy, announced in a circular to financial institutions on Monday, aims to bolster cybersecurity infrastructure. However, the NESG urges the government to reconsider the implementation due to concerns over multiple taxation and the ongoing cost of living crisis faced by Nigerians.
Amid rising inflation and financial exclusion, the NESG argues that the timing of the cybersecurity levy is inopportune. The group suggests the levy should target high-net-worth individuals and be applied to specific transaction amounts to alleviate public concerns. Otherwise, the NESG warns, many Nigerians may avoid electronic transfers altogether, leading to potential revenue loss for the government.
The NESG emphasizes that the current economic climate, with the lingering effects of fuel subsidy removal, exchange rate reforms, and electricity subsidy removal, already strains businesses and individuals. Introducing another financial burden, they argue, could further exacerbate economic hardships.
The group also expresses concern that the levy was rolled out before the Presidential Committee on Fiscal Policy and Tax Reforms concluded its mandate. To avoid potential conflicts and ensure policy coherence, the NESG advises delaying the levy and holding comprehensive consultations until the committee deems it appropriate.
Additionally, the NESG points out that the cybersecurity levy adds to the growing list of government levies and taxes managed by financial institutions, including stamp duty, electronic transfer levy, and VAT. This accumulation, they warn, could increase transaction costs and potentially disrupt the banking sector’s core functions.
Public sentiment echoes the NESG’s concerns, with widespread dissatisfaction and a perception that banking transactions are becoming increasingly expensive due to multiple charges.
