Cybersecurity levy not punitive, to protect national security, –Senate

IGNATIUS OKOROCHA, Abuja

 

The Chairman of the Senate Committee on National Security and Intelligence, Senator Shehu Umar Buba on Thursday addressed the controversy surrounding the proposed implementation of the Cybersecurity levy by the Central Bank of Nigeria (CBN).

According to him,”The levy is provided for in the Cybercrimes (Prohibition, Prevention, etc) (Amendment) Act, 2024.

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

He explained that the exemptions include salary payments, intra-account transfers, loan disbursements and repayments, and other financial transactions.

Senator Buba said the amendments to the Cybercrimes Act were a collaborative effort with the National Assembly’s ICT and Cyber Security Committee. The committee also underwent a transparent public hearing process, receiving contributions from various stakeholders.

Both Houses of the National Assembly unanimously passed it before President Bola Ahmed Tinubu signed it into law.

He 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%, 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.

Senator 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 operationalisation of the cybersecurity levy, noting that  its benefits far outweighs 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 this effort’s 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.

 

Reps urge CBN to halt implementation

 

Meanwhile, the House of Representatives has urged the Central Bank of Nigeria (CBN) to halt the proposed implementation of the cyber security levy.

 

The resolution followed a motion of urgent public importance by Rep. Kingsley Chinda (PDP-Rivers), the minority leader of the House at the plenary in Abuja on Thursday.

 

He said that he was concerned that the CBN circular mandated all Banks, and other Financial Institutions and Payments Service Providers to implement the Cybercrimes Act.

 

This according to him is by applying the levy at the point of electronic transfer origination as “Cyber security Levy’ and remitting the same.

 

Chinda said the wording 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).

 

He said it was also against the Second Schedule to the Cybercrimes Act, which specified the businesses that should be levied accordingly.

 

The lawmaker said that unless immediate steps were taken to halt the proposed action of the CBN, the cybercrime would be implemented in error.

 

He said this is coming at a time when Nigerians were experiencing the aftermath of multiple removal of subsidies from petroleum, electricity and so on with the rising inflation.

 

Adopting the motion, the House directed the CBN to withdraw the ambiguous circular and issue an unequivocal circular in line with the letters and spirit of the law.

 

The House also directed the House Committees on Banking Regulations and other ancillary institutions to guide the CBN properly.

 

NASME, other stakeholders express divergent opinions National Association of Small and Medium Enterprises (NASME) and other stakeholders have expressed divergent opinions on the imposition of cyber security levy by Central Bank of Nigeria (CBN).

They expressed their views in separate interviews with the News Agency of Nigeria (NAN) in Ibadan on Thursday.

In his own opinion, Chairman of NASME in Oyo State, Prince John Karunwi, the introduction of 0.5 per cent cyber security levy on banking transactions would further strain the economic recovery process.

While stating that the need for generating revenue could not be ignored, Karunwi, however, noted that the prevailing economic situation in the country had already had adverse affected on individuals, businesses, business owners and employees.

“Introducing 0.5 per cent cyber security levy on banking transactions now will further strain the economic recovery process, increase poverty, reduce business cash flow and liquidity.

“It will also increase business financial strain, leaving several nano, micro and small businesses to fold up due to poor cash flow to procure inputs, pay salaries and meet other running expenses,” he said.

According to him, this could also lead to laying-off of workers.

“Nursing mothers in paid jobs will undergo more stress in meeting up with work schedules in order to remain at work,” Karunwi said.

He said that the policy could have been delayed it till when the economy must have fully recovered and businesses too from the several devastating effects of the COVID 19 pandemic.

“Worst still, this policy is coming amidst previous ones, such as currency redesign, cashless policy, fuel subsidy removal, increase in electricity tariff and fuel scarcity, among others,” Karunwi said.

To the first female African Professor of Computer Science, Prof. Adenike Osofisan, some of the policies being implemented by government were not well thought-out.

Osofisan underscored the need for government to think through ideas being suggested to it before implementing them.

“Many people give ideas for their own selfish reasons in Nigeria.

“Nigerians are already paying too much for certain things. The money NITDA is making, can’t they take some of it for cyber security?, she queried, adding: “It is very unfortunate.”

However, a financial expert, Mr Tunji Adepeju, said the cyber security levy was just like the education levy which government was collecting from the business sector.

According to him, the cyber security levy is for the agency fighting cyber crime, saying that the banks will just be serving as collection centres, as they do not have anything to do with it.

“The cyber-security levy is just implementing a law that had been enacted since 2016, but which was revised in 2024, just like the education trust levy whose implementation started many years ago.

 

“Just as people are complaining now, the business owners also complained about education levy because a certain percentage of their profits were paid to Federal Inland Revenue Service,” he said.

He, therefore, urged Nigerians to contribute to the cyber security levy, saying that it would be specially managed through the appropriate authority.

“There is no better time to implement the levy than now, as it has been in the law.

“We must commend and praise the courage of the present administration in putting the nation on the right path,” the financial expert said.

 

 

For a better society

—————————————————————–

Kindly follow us across all our social media platforms to stay up-to-date with the latest news and happenings in Nigeria and across the globe.

Facebook – https://facebook.com/championnewsonline

Instagram – https://instagram.com/championnewsonline

Twitter– @championnewsng