ABUJA—The two arms of the National Assembly, the Senate and House of Representatives, yesterday disagreed on the propriety of the 0.5 per cent cybersecurity levy introduced by the Central Bank of Nigeria, CBN.

The disagreement came on a day Northern Elders Forum, NEF, a prominent socio-cultural organization representing the interests of the north, strongly condemned the apex bank’s decision to impose the levy on bank customers.

While the Senate said there was nothing wrong with the levy as both arms passed it into law the House of Representatives asked the CBN to suspend its implementation, following public outcry that has trailed it.

The Senate contended that the cybersecurity levy came into being through a collaborative effort that involved the National Assembly’s ICT and Cyber Security Committee and a transparent public hearing process, with contributions from various stakeholders.

According to the Senate, both arms of the National Assembly unanimously passed it before President Bola Ahmed Tinubu signed it into law.

It also argued that the levy was not punitive, but aimed at protecting national security and the economy.

Chairman of the Senate Committee on National Security and Intelligence, Senator Shehu Umar Buba, APC Bauchi South, who addressed the controversy surrounding the proposed implementation of the cybersecurity levy by the CBN yesterday , said that the levy was provided for in the Cybercrimes (Prohibition, Prevention, etc) (Amendment) Act, 2024.

Senator Buba noted that the provisions of the cybersecurity levy had been in place since 2015 but were delayed due to unclear interpretations and applications.

He, however, clarified that the levy was not punitive as it had numerous exemptions to protect and relieve ordinary citizens, particularly the poor.

According to him, the exemptions include salary payments, intra-account transfers, loan disbursements and repayments, and other financial transactions.

The lawmaker said: “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%, 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.”

Senator Buba, who underscored the critical nature of the cybersecurity levy’s implementation, said its prudent utilisation would bolster the nation’s capacity to evaluate, execute, upgrade, and fortify the security of national critical economic infrastructure, thereby safeguarding the nation’s cyberspace.

He commended the office of the National Security Adviser and the Central Bank of Nigeria, CBN, for initiating and operationalising the cybersecurity levy, highlighting that its benefits far outweighed its drawbacks.
Reps order CBN to halt implementation of 0.5% levy on e-transactions

On its part, the House of Representatives directed the CBN to suspend implementation of the proposed cybercrimes levy of 0.5% on electronic transactions.

It also directed the CBN to withdraw the ambiguous circular in existence and issue an unequivocal circular, in line with the letters and spirit of the Cybercrimes (Amendment) Act, 2024.

The Green Chamber also 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, Kingsley Chinda, PDP Rivers, and 359 others.

Moving the motion, Chinda said 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% levy on electronic transactions in line with Section 44(2)(a) of the Cybercrimes (Amendment) Act, 2024.

He noted that Section 44(2)(a) of the Cybercrimes (Prohibition, Prevention, etc.) (Amendment) Act, 2024 provides that “a levy of 0.5% (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 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 had led to apprehension as civil society organisations, CSOs, and citizens had 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 were taken to halt the proposed action of the CBN, the Cybercrime Act shall be implemented in error at a time Nigerians were experiencing the aftermath of multiple removal of subsidies from petroleum, electricity and so on and the rising inflation.

Northern elders opposse CBN ‘s cybersecurity levy

Meanwhile, Northern Elders Forum, NEF, has also condemned the cybercrime levy, following the footsteps of such other groups as Coalition of Northern Group, CNG, the Pan-Yorubas socio-cultural and political organisation, Afenifere, Nigeria labour Congress, NLC, and Trade Union Congress, TUC, among others.

In a statement released by the Director of Publicity and Advocacy, Abdul-Azeez Suleiman, NEF expressed its dissatisfaction with the policy, citing the escalating costs associated with banking transactions as a result of multiple charges.

The NEF criticized the CBN’s directive as arbitrary, illegal, and out of touch with the realities faced by Nigerians. The forum called on the government to reconsider the policy and explore alternative measures to ease the financial strain on individuals while still promoting the use of electronic payments.

It pointed out that the introduction of cybersecurity levies, in addition to existing fees, such as stamp duty, transfer fees, value-added tax, and SMS charges, has placed an unbearable financial burden on individuals engaging in electronic transactions.

The forum highlighted the various charges bank customers now faced, including cybersecurity levies, ranging from N5 on N1,000 to N50,000 on N10,000,000 transactions, transfer fees, stamp duty, and value-added tax.

According to him, these additional costs have significantly increased the overall expense of electronic transactions for both senders and receivers.

While acknowledging the importance of cybersecurity in safeguarding electronic transactions, NEF emphasized the need for a more balanced approach that ensured the costs of security measures were reasonable and do not excessively burden bank customers.

The forum argued that in a country already grappling with economic challenges and hyperinflationary conditions, the additional financial burden imposed by the cybersecurity levy was unjust and unfair and urged the government and relevant stakeholders to find a sustainable solution that struck a fair balance between enhancing cybersecurity and alleviating the financial strain on the Nigerian populace.

“It is imperative that the administration takes into account the concerns raised by a vast majority of Nigeriand and prioritizes policies that protect the interests of the people while also fostering economic growth and development,’’ it said.

The forum’s stance highlights the importance of considering the impact of regulations on ordinary citizens and advocating measures that promote financial inclusion and alleviate economic challenges.

It said: “It is crucial that the government listens to the concerns of organizations like the NEF and works towards implementing policies that benefit all Nigerians, rather than burdening them with additional costs and hardships.

“It is essential to strike a delicate balance between enhancing cybersecurity and easing the financial burden on the populace, particularly at a time when the Nigerian economy is facing significant challenges due to inflation and other economic factors.”

The NEF urged the authorities and relevant stakeholders to engage in meaningful review and find a solution that addresses the legitimate concerns raised by the public regarding the cybersecurity levy.