As Nigerians from various segments continued their protests against the planned 0.5 percent Cybercrime Levy, the Senate has endorsed the policy initiated by the Central Bank of Nigeria (CBN).
The chairman, Senate Committee on National Security and Intelligence, Senator Shehu Umar Buba, said the levy is provided for in the Cybercrimes (Prohibition, Prevention, etc) (Amendment) Act, 2024.
In his clarification, the official emphasized that the levy is not intended as a punitive measure but rather serves a dual purpose of generating revenue while safeguarding the vulnerable in society.
By implementing these exemptions, policymakers seek to mitigate the potential adverse effects of the levy on those who may already be struggling financially.
Unlike the Senate, the House of Representatives has directed the CBN to suspend the proposed implementation of the levy on electronic transactions.
At its plenary yesterday, the House directed the apex bank to withdraw the ambiguous circular in existence and issue an unequivocal circular in line with the letter and spirit of the Cybercrimes (Amendment) Act, 2024.
But Senator Buba said the exemptions include salary payments, intra-account transfers, loan disbursements and repayments and other financial transactions.
The amendments to the Cybercrimes Act, as stated by Buba, reflect a groundbreaking collaboration between multiple stakeholders, including the National Assembly’s ICT and Cyber Security Committee.
By engaging experts in both technology and legislation, these amendments demonstrate a proactive approach in safeguarding our cyberspace.
The committee’s public hearing process,according to him,embraced transparency and inclusivity by actively engaging various stakeholders. This approach ensured a robust and comprehensive review of the matter at hand, fostering a holistic understanding of the diverse perspectives involved.
Both Houses of the National Assembly unanimously passed it before President Bola Ahmed Tinubu signed it into law.
Senator Buba emphasised that the provisions for the cybersecurity levy have been in place since 2015 but were delayed due to unclear interpretations and applications.
“The Cybercrimes Act of 2015 has provisions for imposing a cybersecurity levy since its enactment, but the vagueness of Section 44 led to different interpretations until the 2024 amendments.
The levy is 0.5 percent, equivalent to half a per cent of the value of all electronic transactions by businesses specified in the Second Schedule to the Act.
“The amendments addressed crucial gaps in the Act and empowered the nation to implement the National Cybersecurity Programme effectively.
They also seek to realign and empower the country to combat the inadequate funding and disruptive effects of cyber threats on national security and critical economic infrastructures,” he said.
Buba underscored the criticality of the cybersecurity levy’s implementation, stating that its prudent utilisation will bolster the nation’s capacity to evaluate, execute, upgrade, and fortify the security of national critical economic infrastructure, thereby safeguarding the nation’s cyberspace.
The committee commended the Office of the National Security Adviser and the Central Bank of Nigeria (CBN) for initiating the operationalising the cybersecurity levy, highlighting its benefits far outweigh its drawbacks.
He expressed appreciation to the leaders and representatives of MDAs at the federal and state levels, as well as to all stakeholders who contributed to its success.
While maintaining that the Committee’s mandate is to create laws that align with the aspirations of Nigerians, he appealed for public support, assuring that the policy will yield maximum benefits for citizens in the shortest possible time.
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 per cent (0.005) equivalent to half per cent 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, which the Office of the National Security Adviser shall administer.
Though the announcement created controversy, the circular exempted some transactions from cybercrime levy.
The exemptions included loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, intra-bank transfers between customers of the same bank, and Other Financial Institutions (OFIs) instructions to their correspondent banks.
The exemption also applies to interbank placements, banks’ transfers to CBN and vice versa, inter-branch transfers within a bank, cheque clearing and settlements, and Letters of Credit (LCs).
Others include banks’ recapitalisation-related funding only bulk funds movement from collection accounts; savings and deposits including transactions involving long-term investments such as treasury bills, bonds; and commercial papers; government social welfare programmes transactions, e.g. pension payments; non-profit and charitable transactions including donations to registered non-profit organisations or charities; educational institutions transactions, including tuition payments and other transaction involving schools, universities, or other academic institutions.
As a way forward, the Lower House mandated its Committees on Banking Regulations and Banking and other Ancillary Institutions to guide the CBN properly.
This followed the adoption of a motion of urgent public importance moved by the House minority leader, Hon. Kingsley Chinda (PDP Rivers) and 359 others.
Chinda said the CBN through a circular to all commercial, merchant, non-interest and payment service banks; other financial institutions, mobile money operators and payment service providers (CBN Circular) dated May 6, 2024 informed Nigerians of a proposed 0.5 percent levy on electronic transactions in line with Section 44(2)(a) of the Cybercrimes (Amendment) Act, 2024.
He said Section 44(2)(a) of the law provides that “a levy of 0.5 percent (0.005) equivalent to half percent of all electronic transactions value by business specified in the Second Schedule to the Act” be paid into the Cybersecurity Fund.
“Further notes that businesses which the said Section 44(2)(a) refers to are listed in the Second Schedule to the Cybercrimes Act to be:
a) GSM Service Providers and all telecommunication companies;
b) Internet Service Providers;
c) Banks and Other Financial Institutions;
d) Insurance Companies and
e) Nigerian Stock Exchange.
“Concerned that the CBN circular mandates all Banks, Other Financial Institutions and Payments Service Providers to implement the Cybercrimes Act by applying the levy at the point of electronic transfer origination as “Cybersecurity Levy” and remitting the same.
“Further concerned that the wordings of the CBN Circular leaves the CBN directive to multiple interpretations including that the levy be paid by Bank customers, that is, Nigerians against the letters and spirit of Section 44(2)(a) and the Second Schedule to the Cybercrimes Act, which specifies the businesses that should be levied accordingly,” Chinda said.
The lawmaker expressed worry that this act has led to apprehension as Civil Society Organisations and Citizens have taken to conventional and Social media to call out the Federal Government, give ultimatums for a reversal of the “imposed levy on Nigerians” among other things.
He argued that unless immediate pragmatic steps are taken to halt the proposed action of the CBN, the Cybercrime Act shall be implemented in error at a time when Nigerians are experiencing the aftermath of multiple removal of subsidies from petroleum, electricity and so on and the rising inflation.
