NESG urges FG to reconsider timing of cybersecurity levy

The Nigerian Economic Summit Group (NESG) has called on the Federal Government to reconsider the timing of the newly introduced cybersecurity levy.

The NESG said this in a statement while reacting to the introduction of a 0.5 percent charge on electronic transactions as a cybersecurity levy by the Central Bank of Nigeria (CBN).

“While acknowledging the imperative of enhancing cybersecurity resilience, the NESG urges prudent consideration of the cybersecurity levy’s timing and implementation modalities.

“By fostering dialogue, targeted application, and comprehensive cybersecurity strategies, Nigeria can navigate the evolving cyber threat landscape while safeguarding economic stability and promoting inclusive growth,” it said.

The NESG urged the CBN to take cognizance of the fact that corporate tax in Nigeria varies based on the size of the company.

“Small businesses with a turnover of below N25 million are exempt from corporate income tax (CIT).

“However, medium and large companies are subject to a CIT rate of 20 percent and 30 percent, respectively,” it said.

According to the group, the effective tax rate paid by businesses could exceed the actual CIT rate when we take into account some additional levies.

It listed such levies to include the 2.5 percent of profit as a tertiary education tax, the one percent National Information Technology Development levy, and the 0.25 percent National Agency for Science and Engineering Infrastructure levy, among others.

Supreme News reports that the CBN had on Monday directed all banks to commence charging a 0.5 percent cybersecurity levy on all electronic transactions within the country.

The directive was contained in a circular jointly signed by the Director, Payments System Management Department, Chibuzo Efobi, and the Director, Financial Policy and Regulation Department, Haruna Mustafa.

The circular was directed to all commercial banks, merchant banks, non-interest banks, and payment service banks.

It was announced that the implementation of the levy would start two weeks from May 6.

“The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution.

“The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy,’” the circular said.

However, some 16 banking transactions were exempted from the new cybersecurity levy.

They include loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and intra-bank transfers between customers of the same bank, among others.

By the calculations of the new levy, five Naira will be charged on a transaction of N1,000, while N50 will be charged on a transaction of N10,000.

Others are the N500 charge on a transaction of N100,000, the N5,000 charge on a transaction of N1,000,000, and the N50,000 charge on a transaction of N10,000,000.

The cybersecurity levy will now be added to already existing bank charges like transfer fees, stamp duty, charges on SMS, and VAT.