Falana, NESG Fault CBN on Cybersecurity Levy, Insist Individuals Not Required To Pay
The recent cybersecurity levy announced by the Nigerian central bank has continued to generate uproars and reactions from legal experts and legislators.
Human rights lawyer, Femi Falana, SAN, says the Central Bank of Nigeria CBN misinterpreted the provisions of the Cybercrime (Prohibition, Prevention, etc.) Amendment Act 2024 as individual customers are not required by law to pay the 0.05% levy.
Falana in a release on Thursday obtained noted that the Cybercrime Act 2025 as amended listed businesses which are required to pay the levy as; a. GSM Service providers and all telecommunications companies; b. Internet Service Providers; c. Banks and other Financial Institutions; d. Insurance Companies; and the Nigerian Stock Exchange.
The renowned lawyer said, “Pursuant to the Cybercrime (Prohibition, Prevention etc) Act 2015 amended in 2024, a levy amounting to 0.5 per cent of the value of all electronic transactions shall be collected and remitted to the National Cybersecurity Fund overseen by the Office of the National Security Adviser.
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“Even though the said levy of 00.0 5 per cent is payable by the businesses listed in the second schedule to the principal Act, the Central Bank of Nigeria has wrongly directed all financial institutions to apply the levy at the point of electronic transfer origination and that the amount is to be explicitly noted in customer accounts under the description “Cybersecurity Levy” and remitted by the financial institution.
“The circular issued by the Central Bank has given the very erroneous impression that the levy is payable by individual customers.
“The erroneous interpretation might have arisen from the substitution of “businesses” for “business” in the amendment. For the avoidance of doubt, by virtue of section 42(a) of the Cybercrime Act 2025 as amended, the businesses which are required to pay the levy are:
a. GSM Service providers and all telecommunications companies;
b. Internet Service Providers;
c. Banks and other Financial Institutions;
d. Insurance Companies;
e. Nigerian Stock Exchange.
“In view of the foregoing, the Central Bank of Nigeria should be directed to withdraw its Circular of 6th of May, 2024 forthwith as it has wrongly interpreted the provisions of the Cybercrime (Prohibition, Prevention, etc.) Amendment Act 2024.
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The CBN should also apologise to Nigerians for the misleading interpretation of the clear and unambiguous provisions of the Cybercrime (Prohibition, Prevention, etc.) Amendment Act 2024.”
Meanwhile, on Thursday, the House of Representatives also directed the Central Bank of Nigeria (CBN) to withdraw its circular directing banks to start deducting a cybersecurity levy on all electronic transactions from Nigerians.
The lawmakers said the apex bank misinterpreted the provisions of the Act and should immediately issue an unequivocal circular in line with the letter and spirit of the law.
Following the directives by the CBN on Sunday for banks to commence the deduction and remittance of the levy, Nigerians across different spectrums rejected the levy, describing it as an additional burden on them.
The Nigeria Labour Congress (NLC) had also joined other civil society organisations in the country to reject what they described as the government’s “insensitivity” to the plights of Nigerians.
Thus, at the plenary of the House of Representatives yesterday, the lawmakers resolved to, and called on the CBN to suspend the directive following a motion moved by the Minority Leader, Kingsley Chinda (PDP, Rivers).
It would be recalled that the member representing Darazo/Ganjuwa Federal Constituency of Bauchi State, Mansur Manu Soro, presented a similar motion on Wednesday, but was overruled by the Speaker, Abbas Tajudeen, who said that the leadership of the House would first discuss the issue.
But while moving a similar motion yesterday, Chinda noted that Nigerians are currently battling with the removal of petroleum, energy, and other subsidies, hence the inappropriateness of the imposition of another levy under any guise.
The House adopted the motion and directed the CBN to withdraw the ambiguous circular and issue an unequivocal circular in line with the letter and spirit of the law.
The House equally directed its committees on banking regulation and other ancillary institutions to guide the CBN properly.
Explaining the decision of the House, the Deputy Chairman, House Committee on Media and Public Affairs, Philip Agbese, said the decision was taken in response to the outcry by Nigerians.
He said the 10th House of Representatives, which is christened “The People’s House,” is all out to work for the welfare and wellbeing of the Nigerian people.
“It’s pathetic. We sympathise with Nigerians. We know that the House has been particular about the issues of revenue, but at the same time, we want to ensure that nobody is unnecessarily taxed as a citizen. These are our objectives,” he said.
When asked why the parliament is rejecting the implementation of the Act at this time when it is the same parliament that passed the law in the first instance, he said: “We are carrying out other legislative activities on that law as it stands today; I wouldn’t want to pre-empt what the committee is going to do in that regard. Nevertheless, I think the outcry is generally about the timing.”
Also reacting, the Nigerian Economic Summit Group (NESG) yesterday asked the CBN to reconsider the cybersecurity tax.
The group stated that the levy could slow down the pace of achieving financial inclusion.
According to the economic think-tank, the new levy will also add to the burden on Nigerians.
The NESG said: “Economically, levies could strain aggregate demand and limit growth. Since increases in government revenue do not compensate for decreases in household income, especially in the face of increased product prices and income falls, the gross domestic product (GDP) could decline during the immediate policy implementation period.”
The group stated that while the policy might be intended to fight cybercrimes and raise revenue for the government, higher revenue should be achieved without imposing severe burdens on poor and vulnerable Nigerians.
