The Nigerian Economic Summit Group (NESG) on Thursday expressed concerns about the timing of the recently introduced 0.5 per cent cybersecurity levy on electronic transactions by the Central Bank of Nigeria (CBN).
On Monday, the Central Bank of Nigeria (CBN) issued a circular to various financial institutions, including commercial, merchant, non-interest, and payment service banks, announcing the cybersecurity levy.
The NESG, in a statement, urged the federal government to reconsider the levy due to concerns over multiple taxation and inflationary pressures burdening Nigerians.
The group pointed out that, amidst escalating inflation and financial exclusion, the timing of the cybersecurity levy is inappropriate given the current cost of living crisis and increased currency circulation.
“The NESG posits that the levy should be targeted at high-net-worth individuals and a specific amount transferred electronically to allay the fears of the populace, who are still battling skyrocketing food and non-food prices. However, if this policy remains, several Nigerians will boycott electronic funds transfers, which does not even bode well for the government due to revenue loss from electronic transfer levy.
“The NESG, however, feels this is a critical time to implement such a policy. The impacts of the fuel subsidy removal, exchange rate reform, and, most recently, the removal of electricity subsidies still permeate the operating costs of businesses and citizens’ welfare.
“The government must be cautious of the numerous strenuous policies that stiffen the purchasing power and welfare of corporations and individuals. Therefore, the government needs to properly sequence reforms for efficient socioeconomic outcomes, especially those that strain the people,” the statement read.
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The NESG expressed worries that the policy was rolled out before the Presidential Committee on Fiscal Policy and Tax Reforms completed its mandate.
To prevent conflicts of interest and ensure policy coherence, NESG advised the government to delay the levy and conduct thorough consultations until the Fiscal Policy Committee deems it appropriate to implement it.
According to the group, the cybersecurity levy adds to the list of levies and taxes managed by financial institutions for the government, including stamp duty, electronic transfer levy, and VAT.
READ ALSO: Nigerians react to new 0.5% cybersecurity levy
This accumulation of taxes, it said, raises the transaction expenses associated with banking and may disrupt banks’ financial intermediary functions.
Since the levy was announced, many Nigerians have expressed widespread dissatisfaction, citing a growing perception that banking transactions are becoming more expensive due to numerous charges.
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