DESPITE public outcry over the introduction of the 0.5 per cent cyber security levy, the Senate Committee on National Security and Intelligence has given its nod to the implementation of the directive by the Central Bank of Nigeria (CBN).
Most citizens and pressure groups like the Nigeria Labour Congress (NLC) the Northern Elders Forum and the presidential candidate of the Labour Party in the 2023 General elections Peter Obi have all kicked against the levy while berating the government’s ‘insensitivity’ to the current economic plight of Nigerians.
But the Senate Committee on National Security and Intelligence said that the 0.5 per cent cybercrime levy provided for in the Cybercrimes (Prohibition, Prevention, etc) (Amendment) Act, 2024 was not punitive, arguing that it had numerous exemptions to protect and relieve ordinary citizens, particularly the poor.
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The chairman of the Committee, Shehu Umar Buba clarified controversy surrounding the proposed implementation of the levy by the CBN.
On Monday, May 6, the CBN directed banks and other financial institutions to implement a 0.5 per cent cybersecurity levy on all electronic transfers.
The CBN said the policy would take effect in two weeks, adding that the charges would be remitted to the National Cyber Security Fund, which the Office of the National Security Adviser would administer.
Following the enactment of the Cybercrime Act 2024 and under the provision of Section 44 (2)(a) of the Act, a levy of 0.5 per cent (0.005) equivalent to 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.
However, the circular exempted some transactions from the levy.
According to the chairman, the exemptions include salary payments, intra-account transfers, loan disbursements and repayments, and other financial transactions.
He said the exemption also applied to interbank placements, banks’ transfers to CBN and vice versa, inter-branch transfers within a bank, cheque clearing and settlements, and Letters of Credit (LCs).
It also include banks’ recapitalisation-related funding only bulk funds movement from collection accounts; savings and deposits including transactions involving long-term investments such as treasury bills, bonds; and commercial papers; government social welfare programmes transactions, e.g. pension payments; non-profit and charitable transactions including donations to registered non-profit organisations or charities; educational institutions transactions, including tuition payments and other transaction involving schools, universities, or other academic institutions, among others.
Buba emphasised that the provisions for the cybersecurity levy had been in place since 2015 but were delayed due to unclear interpretations and applications.
“The Cybercrimes Act of 2015 has provisions for imposing a cybersecurity levy since its enactment, but the vagueness of Section 44 led to different interpretations until the 2024 amendments. The levy is 0.5 per cent, equivalent to half a percent of the value of all electronic transactions by businesses specified in the Second Schedule to the Act”, he said.
He further explained the amendments to the Cybercrimes Act were a collaborative effort with the National Assembly’s ICT and Cyber Security Committee. He added that the committee underwent a transparent public hearing process, receiving contributions from various stakeholders.
“Both Houses of the National Assembly unanimously passed it before President Bola Ahmed Tinubu signed it into law”, he said.
“The amendments addressed crucial gaps in the Act and empowered the nation to implement the National Cybersecurity Programme effectively. They also seek to realign and empower the country to combat the inadequate funding and disruptive effects of cyber threats on national security and critical economic infrastructures,” the lawmaker added.
The chairman underscored the importance of the cybersecurity levy’s implementation, stating that its prudent utilisation would bolster the nation’s capacity to evaluate, execute, upgrade, and fortify the security of national critical economic infrastructure.
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.