GLOBAL tax and advisory firm, KPMG has criticised the Nigerian government on its move to implement the 0.5 per cent cybersecurity levy as stipulated in the Cybercrime Amendment Act 2024.
Alhough President Bola Tinubu has suspended the implementation of the levy following public outcry, the global tax firm argued that no country could tax its way into prosperity.
Commenting on the new levy, the company argued that there was empirical evidence proving that higher taxes would not lead to sustainable growth.
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In a tax alert statement it issued on Monday, May 13, through its head, Tax, Regulatory and People’s Services, Wale Ajayi, the firm raised concerns over the timing of the Act’s implementation, considering the country’s prevailing economic conditions.
It further noted that the need for revenue mobilisation in the face of significant challenges warranted the implementation of the levy even though the law had been there since 2015.
“Given this context, the government may go to any length to mobilise the required revenue. However, research has shown that higher taxes do not lead to sustainable growth. No country can tax itself to prosperity! Perhaps, it is in recognition of this that the current administration and the Presidential Committee on Fiscal Reforms have often emphasised that the government will not introduce new taxes,” said KPMG.
Also, the firm criticised the lack of cost-benefit analysis given multiple reports of about N3 trillion to be generated from the levy annually.
It further advised that such levies should be accompanied by an adequate expenditure statement to justify them.
Furthermore, it questioned how the implementation of the Act would drive financial inclusion across the country given the fear that individuals and businesses would resort to other forms of transaction.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.