The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has condemned the recent directive by the Central Bank of Nigeria (CBN) on the implementation of a 0.5 per cent cybersecurity levy on all electronic transactions, describing it as another stealth tax on the private sector.
NACCIMA said this in a statement issued by its National President, Dele Kelvin Oye, on Tuesday, May 7, 2024.
Oye said while it is important to bolster the country’s national cybersecurity infrastructure, the imposition of the levy without a limit raises significant issues that warrant a thorough review and reconsideration by the authorities.
He noted: “We are still in consultation with our stakeholders, however, we feel compelled to comment on the implementation of this cybersecurity levy as outlined in a circular dated 7th May 2024 and signed by the respective Directors of the CBN Payments System Management Department and the Financial Policy and Regulation Department of the CBN.
“While NACCIMA recognizes the importance of bolstering our national cybersecurity infrastructure, the blanket imposition of this levy without a limit raises significant issues that warrant a thorough review and reconsideration by the authorities.
“The security and defense sectors are already substantial recipients of the national budget. They are responsible for tackling a hybrid of security challenges like terrorism, banditry and other internal conflicts in Nigeria.
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“However, cybersecurity is firstly a transnational issue which requires cooperation between international security agencies and requires highly skilled and experienced human resources. For this reason, we believe the burden should be shared across the current security and defense budget.”
Oye added: “With over N600 trillion (NIBSS 2023) in transactions annually, the projected revenue from this levy is considerable. Therefore, we expect transparency in the application of these funds through clear performance metrics essential to justify the additional levies.
“For this reason, we must ask: what 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 N500. It is also a fact that other methods exist to reduce local online cybersecurity risks through professional private sector experts.
“The imposition of this levy, which comes at a time when the business community is anticipating the final recommendations from the Presidential Fiscal Policy and Tax Reforms Committee, is particularly troubling.
“We were reassured that the tax system would be streamlined to no more than ten significant types. However, this new tax could detrimentally affect Nigeria’s competitiveness in the Ease of Doing Business rankings, discourage foreign direct investment, instigate capital flight, and exacerbate the talent drain in the technology sector.
“In light of these concerns, NACCIMA appeals to the Central Bank of Nigeria and the relevant authorities to reconsider the imposition of this cybersecurity levy.
“We urge a suspension of the levy for a few weeks pending a comprehensive review and consultation with key stakeholders.”
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