(UPDATED) Representatives order CBN to suspend cybersecurity tax

The House of Representatives on Thursday asked the Central Bank of Nigeria to withdraw the circular ordering all banks to start charging a 0.5 percent cybersecurity tax on all electronic transactions within the country, The Nation reports.

The motion on the urgent need to stop and modify the implementation of the cybersecurity levy was moved by the member representing Obio/Akpor constituency, Kingsley Chinda.

The circular, which was addressed to all commercial, merchant, interest-free and payment services banks, among others; He noted that the implementation of the tax begins two weeks from Monday, May 6, 2024.

“The tax will be applied at the point of origin of the electronic transfer, then it will be deducted and remitted by the financial institution. The deducted amount will be reflected in the customer’s account with the mention ‘Cybersecurity Tax’,” the circular reads in part.

In the motion, Chinda said: “The House notes that the companies referred to in the said Section 44(2)(a) are listed in the Second Schedule of the Cyber ​​Crimes Act as GSM Service Providers and all telecommunications companies ; Internet service providers; Banks and Other Financial Institutions; Insurance Companies and Nigerian Stock Exchange.

“The CBN circular requires all banks, other financial institutions and payment service providers to implement the Cybercrime Act by levying the tax at the point of origin of the electronic transfer as “Cybersecurity Tax” and remitting it.

“The wording of the CBN circular leaves the directive to multiple interpretations, including the fact that the tax is paid by bank customers, that is, Nigerians, contrary to the letter and spirit of Section 44(2)( a) and the Second Schedule of the Cybercrime Law. , which specifies the companies to which the corresponding tax must be applied,” said the legislator.

According to the lawmaker, this development “has created apprehension as civil society organizations and citizens have taken to conventional and social media to call on the Federal Government to issue ultimatums to reverse the ‘tax imposed on Nigerians’, among others things”.

He maintained that unless immediate pragmatic steps are taken to stop the proposed action by the CBN, “the Cyber ​​Crimes Act will be wrongly implemented at a time when Nigerians are experiencing the consequences of the multiple removal of oil subsidies, electricity, etc., and rising inflation.”