New tax ignites fury among already suffering Nigerians

Nigerians reacted with fury Tuesday a day after the government imposed a new levy on digital transactions at a time of extreme hardship caused by the Tinubu administration’s economic policies.

The Central Bank of Nigeria (CBN) directed banks and other financial institutions to implement a 0.5% “cybersecurity levy” on electronic transfers. It said the levy is backed by the new Cybercrime (prohibition, prevention etc) Amendment Act of 2024.

“Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and under the provision of Section 44 (2)(a) of the Act, a levy of 0.5% (0.005) equivalent to a half percent 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 (NCF), which shall be administered by the Office of the National Security Adviser (ONSA),” CBN said in a memo late Monday.

It directed commercial, merchant, non-interest and payment service banks, as well as mobile money operators to make deductions and send same to an account held by the central bank. The so-called national cyber security fund will be administered by the office of the National Security Adviser.

The directive, which will take effect May 20, means payments or transfers done digitally will be charged 0.5% of the amount involved. Transfers within the same banks or involving accounts held by the same person will not be affected, the CBN said.

The transfer of N1 million through two banks, for instance, will be charged N5,000.

Array of charges on banking transactions

It is the latest in a string of charges imposed by the government, which discourages cash-based transactions, yet, alongside financial institutions, imposes a raft of fees on payments and transfers.

Citizens already pay N50 stamp duty on all transactions N10,000 and above. They pay 7.5% VAT, transfer fees, and SMS charges.

The latest policy has roiled Nigerians at a time the country faces its worst cost-of-living crisis yet.

“We’re already paying NITDA Levy (information technology), ITF (training), TETFUND (education), and now Cybersecurity Levy, besides other auxiliary fees. I expect by 2027 for a Federal Labour Levy to be enacted to help pay salaries of workers,” said Ndubuisi Ekekwe, professor and chairman of Tekedia Capital, an investment firm.

“We need to learn something because this piecemeal disparate approach of charging this and that, as fees, on people’s properties, seems non-optimal in my view. Taking 0.5% is a lot of money, and it makes the Office of the National Security Adviser (NSA) the most investable fintech in Nigeria if it is open for investments,” he said.

Chidi Odinkalu, a law professor and former head of the National Human Rights Commission, said the policy was “taking a joke too far.”

The CBN, he said, “is created & its powers are constrained by law. This thing here is entirely outside the powers allocated to by the #CBNAct. This joke has to stop!”

Many called for the suspension of the policy. Fowóseré Esq., an X user, said, “Cybersecurity levy on the people during these hard times is a madness.”

Another responded: “When the policy is about taking from the people, it’s done with a speed of light, but when it’s about people’s welfare, they foot-drag.”

The comedian Seyi Law, said, “A 0.5% charge in the Nigeria of today is in itself too much punishment on Nigerians. Are we trying to discourage banking transactions again and encourage cash keeping?”