Cyber Security Levy in Nigeria: All You Need to Know, Reactions

  • Africa Tax Review takes a deep dive into the recently controversial Cyber Security Levy.

Cyber Security Levy in Nigeria in recent time has been the center of discussion in Nigeria. This follows the recent announcement of the Central Bank of Nigeria, CBN that all banking transactions will now attract a 0.5 percent cyber security levy.

Alongside the directive, the CBN also notified that transactions that will be affected will include those done within the confines of commercial, merchant, non-interest, and payment service banks.

This levy according to the CBN will be remitted to the National Cybersecurity Fund, under the administration of the Office of the National Security Adviser.

As though the shock of the sudden levy wasn’t enough, the apex bank also went further to disclose that implementation of the new levy will commence two weeks from the day of announcement making May 20th the day implementation starts.

Cyber Security Levy in Nigeria: The Genesis

Introduced in 2011 by Senator Gbenga Kaka of the All Progressives Congress, Ogun East. At that time, the idea wasn’t right so it was pushed back then it was resurrected in 2013.

The Cybercrime Bill as it was called on its re-introduction in 2013 was passed by the Senate in 2014 and was signed into law by the presidency in 2015 after key amendments.

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Key Provisions

Beyond the backlash that the levy is generating, here are some key solutions the law is expected to bring to Nigerian cyberspace:

  • Unauthorized access to national security intelligence can lead to a five-year prison term, a ₦5 million fine, or both.
  • On the other hand, causing damage or disruption to Nigeria’s computer systems, networks, or data traffic could result in a ten-year imprisonment without the possibility of bail. This stringent penalty is imposed due to the significant impact such actions can have on both the economy and national security.
  • Additionally, obtaining information from a government employee under pretences carries a punishment of a two-year jail term, a ₦2 million fine, or both.
  • Cybercafés are obligated to register with both the “Computer Professionals’ Registration Council” and the Corporate Affairs Commission for business name registration.
  • Furthermore, they are required to maintain a register documenting the individuals utilizing their services. Individuals engaging in online fraud via these establishments risk a three-year prison sentence, a ₦1 million fine, or both.
  • In cases where the cybercafé is complicit in the fraud alongside the individual, the owners may face a three-year jail term, a ₦2 million fine, or both.
  • Bank employees or personnel from any financial institution who redirect electronic messages to commit fraud will face a five-year prison sentence or a ₦7 million fine. In certain instances, they may be subject to both penalties.
  • Individuals bold enough to steal an automated teller machine (ATM) will receive a seven-year prison term or a ₦10 million fine, and in certain scenarios, both penalties may apply.
  • Since stealing an ATM is a challenging feat, the Act stipulates that unsuccessful attempts are punishable by a one-year jail term.
  • Stealing from an automated teller machine (ATM) attracts a seven-year prison sentence or a ₦10 million fine, and in some cases, both penalties.
  • Recognizing the difficulty of such an endeavour, the Act specifies that unsuccessful attempts carry a one-year jail term.
  • In the act, cyberstalking and cyberbullying offences incur stricter fines and penalties compared to hacking government systems.
  • The definition of these offences is extensive, with varying consequences. For instance, posting harassing content can result in a 10-year prison term and/or a ₦25 million fine.
  • Similarly, sending offensive or pornographic messages may lead to a ₦7 million fine, a three-year jail term, or both penalties in certain cases.

The Kickbacks

The Nigerian mainstream and social media space has been a beehive of commentary as Nigerians across all walks of lives are in no small measure criticizing the new levy which many have described as an additional tax burden in the face of economic hardship.

A major kickback was from the House of Representatives a few days after the CBN announcement. The lower chamber further asked the CBN to suspend collection as the levy is ill-timed considering the current economic challenges faced by Nigerians.

Similarly, The Trade Union Congress (TUC) recently issued a threat of a large-scale protest that could effectively halt the Nigerian economy if the Federal Government does not rescind the contentious cybersecurity levy implemented by the Central Bank of Nigeria.

Talking from an expert view, Dr. Abdulrazaq Fagge, an economics lecturer at Yusuf Maitama University recently interviewed by the BBC, criticized the government’s decision, stating that it would adversely impact Nigeria’s already struggling economy.

He emphasized that imposing an additional financial burden on citizens during times of hardship is ill-advised. Dr. Fagge highlighted that the move would particularly harm small businesses, pointing out the unfairness of deducting a cybersecurity levy, such as five thousand naira from a million-naira transfer, which burdens ordinary individuals.

The African Tax Review team has been able to gather such commentary as seen below:

Response from President Tinubu

Caving the yearning of the people, President Bola Ahmed Tinubu, at the weekend, directed the Office of the National Security Adviser suspends the implementation of the cybersecurity levy, as provided for in the Cybersecurity Act 2015.

The details revealed that this is a move to avoid overburdening citizens who were already battling economic hardship.