The Nigerian Economic Summit Group (NESG) has called for a reassessment of the recent cybersecurity levy imposed on electronic transactions by the Central Bank of Nigeria (CBN).
Expressing apprehension over the impact of the 0.5 per cent levy (equivalent to 0.005), NESG stressed its potential to hinder strides towards achieving financial inclusion. Highlighting concerns about the levy’s burden on Nigerians amid existing challenges in employment and income diversity, NESG cautioned against its implementation.
NESG cautioned that the introduction of such a levy could exacerbate household welfare challenges and widen disparities between rural and urban areas. It suggested that increased government spending and household transfers could serve as effective measures to mitigate these adverse effects. Moreover, NESG warned of potential strains on aggregate demand and economic growth due to the levy, which could lead to a decline in Gross Domestic Product (GDP).
While recognizing the policy’s intent to combat cybercrimes and boost revenue generation, NESG emphasized the necessity of achieving higher revenue without disproportionately affecting vulnerable Nigerians.
It also highlighted the risk of inadvertently creating opportunities for cybercriminals to exploit alternative routes. NESG proposed a collaborative approach involving financial institutions, security agencies, the EFCC, and other stakeholders to effectively address cybercrimes.
NESG recommended a review of the cybersecurity levy, especially in light of the CBN’s objectives to reduce financial exclusion and currency circulation. It expressed concern that implementing the policy could impede progress towards the 2025 target of achieving 95 percent financial inclusion.
However, NESG underscored the cumulative impact of various taxes and levies on bank transactions, including stamp duty, electronic transfer levy, and VAT, which could increase transaction costs and disrupt financial intermediation.
Meanwhile, NESG urged careful consideration of the timing and implementation strategies for the cybersecurity levy. It advocated for dialogue, targeted interventions, and comprehensive cybersecurity measures to address evolving cyber threats while fostering economic stability and inclusive growth.
