Tinubu orders suspension of cybersecurity levy – report

Tinubu orders suspension of cybersecurity levy

According to a Punch report, Nigeria’s President Bola Tinubu has asked the Central Bank of Nigeria (CBN) to suspend the implementation of the unpopular cybersecurity levy policy.

He ordered a review of the policies criticized by Nigerians.

Sunday Punch quoted an anonymous presidential source as saying that the President was aware of the economic burden on Nigerians since the start of his tough economic reforms last May, adding that he did not want to risk increasing the burden with further levies .

“The President is sensitive to the feelings of Nigerians. And he will not want to continue implementing policies that increase the burden on people.

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“Therefore, he has asked the CBN to shelve this policy and ordered a review. I would have said that he ordered the CBN, but that is not appropriate because the CBN is autonomous. But he asked the CBN to stop and check things again,” the source reportedly said.

Another source also said that the discrepancies in the interpretation of the Cybersecurity Act prompted the President to order the suspension and review of the implementation of the CBN guidelines.

“If you look at it, the law predates the Tinubu administration. It was enacted in 2015 and signed by Goodluck Jonathan. It is only now being implemented.

“You know he (Tinubu) was not there when this directive was circulated. And he doesn’t want to portray his government as insensitive. As it stands now, the CBN has withheld directing banks to start charging fees. So the president is sensitive. His aim is not to simply tax Nigerians. That is not his intention. That is why he has ordered a review of this law,” the source said.

House vs. Senate

Tinibu’s order came after the House of Representatives last Thursday asked the CBN to withdraw its circular directing all banks to impose a cybersecurity levy of 0.5 percent on all electronic transactions in the country.

The Nigerian Senate was less pro-people in supporting the policy without hesitation.

CBN Circular

The CBN issued a circular on May 6, 2024 requiring all banks, mobile operators and payment service providers to implement a new cybersecurity levy in accordance with the provisions of the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024.

Under the law, a levy of 0.5 percent of the value of all electronic transactions is collected and remitted to the National Cybersecurity Fund, which is overseen by the Office of the National Security Adviser.

Financial institutions are required to collect the levy at the time of electronic transfer.

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The deducted amount must be explicitly noted in the customer account under the name “Cybersecurity Levy” and paid by the financial institution. All financial institutions are required to start introducing the levy within two weeks of publication of the circular, i.e. on May 20, 2024.

However, financial institutions must transfer their bulk remittances to the NCF account at the CBN by the fifth business day of each subsequent month.

The circular also sets out a time frame within which financial institutions must reconfigure their systems to ensure complete and timely submission of remittance files to Nigeria Interbank Settlement Systems Plc as follows: “Commercial, commercial, non-interest and payment services banks – within four weeks after the circular was issued.

Exceptions include transfers from other financial institutions to their correspondent banks, inter-bank placements, transfers from banks to CBN and vice versa, transfers between branches within a bank, check clearing and settlement, letters of credit and bank recapitalization financing.

Others involve mass movements of funds from collection accounts, savings, and deposits, including transactions in long-term investments such as Treasury bills, bonds, and commercial paper, as well as transactions in government welfare programs.

These may include pension payments, charitable and charitable transactions, including donations to registered non-profit organizations or charities, educational institution transactions, including tuition payments and other transactions involving schools, universities or other educational institutions, and transactions affecting the Bank’s internal accounts. include , branch accounts, reserve accounts, nostro and vostro accounts and trust accounts.

question of interpretation

“The wording of the CBN circular leaves the CBN policy open to multiple interpretations, including that the levy on bank customers, i.e. the Cybercrimes Act, which determines the companies that should be taxed accordingly.

“Unless immediate pragmatic steps are taken to stop the CBN’s proposed actions, the Cybercrime Act will be erroneously implemented at a time when Nigerians are reeling from the consequences of multiple cuts in subsidies on petroleum, electricity, etc. in the face of rising inflation . experience,” he said.

The House passed the motion and directed the CBN to withdraw the ambiguous circular and issue a clear circular in accordance with the letter and spirit of the law.

The House also directed its committees on banking regulation and other subsidiary institutions to properly manage the CBN.

Femi Falana

Human rights lawyer Femi Falana (SAN) supported the lawmakers’ position, saying the levy was not intended for individuals.

In a statement released on Thursday, Falana said the CBN misinterpreted the provisions of the Cybercrime (Prohibition, Prevention, etc.) Amendment Act 2024.

“Although the said 0.5 percent levy is payable by the entities listed in the Second Schedule of the Principal Law, the CBN has erroneously directed all financial institutions to collect the levy at the time of electronic transfer at the rate of 0.5 percent “The levy must be explicitly noted in customer accounts under the name ‘Cybersecurity Levy’ and paid by the financial institution,” he said.

He further said: “The misinterpretation may be due to the replacement of ‘company’ with ‘business’ in the amendment.”

Kunle Adegoke

Earlier, another senior lawyer, Kunle Adegoke, had described as unconstitutional Section 44 of the Act, which the CBN relied on to order the deduction of the cybersecurity levy.

The lawyer said Section 44 of the law relied upon by the CBN was in conflict with Section 162 of the Constitution and it was trite law that whenever a law contradicted the Constitution, the Constitution prevailed.

He said: “The implication is that no branch of government, no government agency or the National Assembly itself can use these revenues for any other purpose or to achieve any other objective until they first enter the accounts of the Federation.”

“If Section 44 of the Cybercrime Act is now unconstitutional because it says that levies collected should be transferred to an account other than the federal account, then the directive of the CBN that says levies collected should be implemented by the National Security Adviser , be unconstitutional.” also be unconstitutional. You can’t build anything on nothing. It will collapse.”

The Senate wants taxes to work against people

On his part, Chairman, Senate Committee on National Security and Intelligence, Senator Shehu Umar Buba, said the levy is not punitive as it provides for numerous exemptions to protect and provide relief to ordinary citizens, especially the poor.

Senator Buba said the exemptions include salary payments, intra-account transfers, loan disbursements and repayments and other financial transactions.

The lawmaker said the amendments to the Cybercrimes Act were a joint effort with the ICT and Cyber ​​Security Committee of the National Assembly.

According to him, the committee also went through a transparent public hearing process and received inputs from various stakeholders.

“Both Houses of the National Assembly passed it unanimously before President Bola Ahmed Tinubu signed it,” he said.

Senator Buba highlighted that the cybersecurity levy provisions have been in force since 2015 but have been delayed due to unclear interpretations and applications.

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