News
TUC, LCCI Urge Government to Revoke 0.5% Cybersecurity Levy on Bank Transactions
Trade Union Congress (TUC) and Lagos Chamber of Commerce and Industry (LCCI) asked the federal government to rescind the decision to impose a cybersecurity levy on citizens’ bank transactions.
In separate statements, the organisations expressed shock over the recent directive by the Central Bank of Nigeria (CBN) to banks, imposing the 0.5 percent levy on almost all electronic transactions.
Similarly, Labour Party (LP) presidential candidate in the 2023 general election, Peter Obi, on Wednesday, described the new levy as “taxes too many and aimed at milking a dying economy”.
A statement by TUC President, Festus Osifo, said the policy was illogical, as it was coming at a time that Nigerians were grappling with high cost of living brought about by the devaluation of the naira, hike in the cost of petrol, as well as the increment in the cost of electricity.
Osifo stated, “We are quite disturbed that since the inception of this administration, its policies have brought pain, anguish and sorrow on Nigerians.
“A bank account holder in Nigeria today is currently charged stamp duty, transfer fee, Value Added Tax (VAT) on transfer fee, and all forms of account maintenance levies by both government and the banks. This burden seems not to be enough, as government is poised to inflict further pain on the already battered Nigerians.
“So many policies of this government are not only imposing hardship on the downtrodden Nigerians, but also on businesses, as some of them are shutting down because of the unfriendly business environment.
“We call on the federal government to give a marching order to the CBN to immediately withdraw the circular and cancel the planned levy forthwith; failure of which we will be left with no option than to mobilise all our members, stakeholders, and, indeed, the entire masses to embark on immediate protest that would culminate in the total shutdown of the Nigerian economy, as this is one exploitation too many.”
TUC regretted that the National Assembly that ought to be the bastion of democracy and the protector of the citizens had often engaged in collusion with elements within the executive to exploit the people.
It added, “How can such obnoxious law see the light of day in a truly people-oriented legislative house. This is, indeed, a conspiracy of the oppressors against the masses and citizens of this country and it must be resisted by all well-meaning Nigerians.
“Financial analysts have done a preliminary estimate using the 2023 online transfer volume in Nigeria that fell within these categories and put the value at over N2 trillion.
“What kind of cybercrime are we fighting with this humongous amount of money? This ugly development will further encourage people to hoard cash at home, reduce financial inclusion, increase poverty and exacerbate misery index.”
TUC stated that the cost of living was at an all-time high, and food inflation was biting, all contributing to the miserable index of Nigerians. It described the new charge as a deliberate plot to continue to drain Nigerians of their hard-earned money.
TUC said, “All Nigerians are interested in right now is the urgent conclusion of discussions around the minimum wage, and not a vexatious policy that is further reducing the already depleted disposable income of the masses and indirectly ridiculing the gain, which the minimum wage would have brought to the people, when concluded.”
LCCI equally expressed deep concern that the funds from the charge might not be used to enhance the country’s cybersecurity architecture to guarantee cyber-safety for technology users in Nigeria.
Director General of LCCI, Dr. Chinyere Almona, said in a press release that the justification for the levy was unclear. Almona demanded that it be withdrawn to allow more consultations with critical stakeholders.
Almona said, “The directive that the remittance of this levy should go to the Office of National Security Adviser suggests that the funds may not be used to enhance our cybersecurity architecture to guarantee cyber-safety for technology users in Nigeria.
“We believe that since the collection of this levy cannot guarantee the protection of payers from cyberattacks, it is difficult to justify its collection at this time.
“In the same vein, the collection approach with some exemptions can create confusion regarding what transactions really qualify for the exemptions.
“Implementing of this directive can gradually encourage some people to return to holding cash to avoid paying the levy. This can negatively impact the achievement already recorded with the cashless policy.”
LCCI urged the government to work towards amending the enabling law to reflect current realities, initiate programmes that reflate the economy, and invest more in digital infrastructure to support business operations.
It stated that the directive by the CBN to banks to implement Section 44 of the Cybercrime Act 2024, which imposes a 0.5 per cent cybersecurity levy on Nigerians, remain a subject of concern to the LCCI.
Almona said, “By this directive, individuals and businesses will be burdened with an additional levy amidst unsettled performance crises with power supply after the recently reviewed electricity tariffs.
“We urge the government to reconsider the implementation of this directive as its timing is wrong, and the justification is unclear. This directive should be withdrawn while we call for more consultations with critical stakeholders.
“We also urge the government to harmonise its tax initiatives with the work done by the Presidential Committee on Tax and Fiscal Reforms to prevent multiple taxations and poor coordination of the expected new tax regime.”
LCCI said at a time when government revenues were at record levels from higher crude prices, and higher revenues accruing to the federation account, including saved resources from the stoppage of subsidies, Nigerians ought to be seeing projects created to enhance their living standard as a dividend of democracy for the sacrifices made by Nigerians.
It warned that in the face of biting inflation that had continued to weaken the purchasing power of consumers and with companies burdened with a rising cost of production, any imposition of additional cost burden will slow down economic activities.
On his part, Obi lamented that instead of nurturing the recovery and growth of the economy, the government, by its multiple taxation, was more interested in heaping more burden on the people who were already suffering severe economic stress.
Writing on his X handle, Obi said, “The introduction of yet another tax, in the form of cybersecurity levy, on Nigerians who are already suffering severe economic distress is further proof that the government is more interested in milking a dying economy, instead of nurturing it to recovery and growth.
“This does not only amount to multiple taxation on banking transactions, which are already subject to various other taxes, including stamp duties, but negates the government’s avowed commitment to reduce the number of taxes and streamline the tax system.
“The imposition of a cybersecurity levy on bank transactions is particularly sad given that the tax is on the trading capital of businesses and not on their profit, hence, will further erode whatever is left of their remaining capital, after the impact of the Naira devaluation high inflation rate.
“It is inconceivable to expect the suffering citizens of Nigeria to separately fund all activities of the government. Policies such as this not only impoverish the citizens but make the country’s economic environment less competitive.
“At a time when the government should be reducing taxes to curb inflation, the government is instead introducing new taxes. And when did the office of the National Security Adviser (NSA) become a revenue-collecting centre?
“And why should that purely national security office receive returns on a specific tax as stated in the new cybersecurity law?”
Senior Advocate of Nigeria (SAN), Kunle Adegoke, also said the 0.5 per cent cybersecurity levy banks will charge on electronic transfers will increase hardship for the poor Nigerians. Adegoke stated this in a television programme monitored in Abuja on Wednesday.
The senior lawyer said poor Nigerians were already complaining about certain charges on their transactions.
He stated, “Why I feel the timing is not appropriate is this, the law being implemented by the CBN is the Cybercrime Act of 2015, which was recently amended in 2024. And the provision requiring that 0.5 per cent be levied was contained in the 2015 Act.
“Now the directive by the CBN that 0.5 per cent to be levied on every electronic transaction emanated from 2024 amendment act.
“With this position, one feels that the spectrum of society that is going to feel it much more will be the people in the lower rungs of the economic ladder, whereas the rich and the elite may not feel it as much considering the amount that may be involved in the transactions to be carried out.
“The poor masses always have issues. They always complain that banks levy certain charges on their transactions.”
Chuks Okocha, Onyebuchi Ezigbo and Dike Onwuamaeze
