Public outrage forces Nigeria's suspension of cybersecurity levy

A cold reception of a proposed cybersecurity levy in Africa's largest economy and most populous country has forced the government to request its suspension.

The tax, with which banks and fintechs to charge 0.5% on all electronic transactions, drew criticism and backlash from virtually all corners of a country grappling with economic challenges. 

The Bola Tinubu administration directed the Central Bank of Nigeria to postpone the implementation of the levy indefinitely. It also ordered for a review after members of the House of Representatives raised multiple concerns. The decision came in response to widespread calls for a reevaluation of the policy. 

Initially stipulated to be effective on May 20, 2024, the levy, mandated by the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024, was meant to finance the National Cybersecurity Fund, which is overseen by the Office of the National Security Adviser. The Act was enacted in 2015. 

However, the imposition sparked controversy, raising concerns regarding its likely effects on the cost/ease of doing business in the country and the growth of digital transactions. Besides, citizens are already subject to other charges, including transfer fees, stamp duty, SMS charges, and VAT. 

Among bodies that condemned the tax was the Socio-Economic Rights and Accountability Project (SERAP), which threatened the presidency with legal action should the decision not be reversed within 48 hours of its announcement. Like other critics, SERAP cited multiple layers of taxation and economic hardships.

A presidency official said, “The President is sensitive to what Nigerians feel. And he will not want to proceed with implementing a policy that adds to the burden of the people". 

“So, he has asked the CBN to hold off on that policy and ordered a review. I would have said he ordered the CBN, but that is not appropriate because the CBN is autonomous. But he has asked the CBN to hold off on it and review things again,” the source explained. 

The postponement comes on the heels of the CBN's decision to extend the suspension of processing fees on bank cash deposits from May 6 to September 30, 2024. Both moves seem armed to alleviate burdens associated with banking and further remove stomping blocks to the country's financial inclusion drive. 

The suspension of the cybersecurity levy particularly reflects the power of the public when it comes to shaping government policies. While the tax is yet under review, this development underscores the essence of accountability and responsiveness in governance.

As the country contends with economic challenges, inclusive policymaking and public engagement remain paramount.