The Central Bank of Nigeria’s (CBN) recent imposition of a 0.5% tax on most electronic transactions has sparked widespread criticism from various stakeholders, including the Nigerian Labour Congress (NLC), the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), and financial market analysts.
The CBN defended the levy as part of efforts to combat cybercrime in the financial system, citing the Cybercrime (Prohibition, Prevention, etc.) (Amendment) Act 2024 as legal grounds for its implementation. However, stakeholders argue that the timing of the levy, amidst economic challenges and inflation, exacerbates the financial burden on citizens and businesses.
The NLC condemned the levy, emphasizing its detrimental impact on citizens already grappling with economic challenges. The organization called for the reversal of the directive, urging the government to prioritize policies that alleviate financial burdens.
Similarly, NACCIMA raised concerns about the levy’s potential negative effects on Nigeria’s competitiveness, foreign direct investment, and ease of doing business rankings. The organization advocated for a thorough review and consultation with key stakeholders before its implementation.
The Socio-Economic Rights and Accountability Project (SERAP) threatened legal action if the levy is not withdrawn within 48 hours, citing its violation of constitutional provisions and human rights obligations. SERAP called on President Bola Tinubu to intervene and repeal repressive provisions of the Cybercrimes Act 2024.
Financial analysts also criticized the levy, questioning its legality, potential impact on monetary policy, and lack of clarity on its utilization. They warned that the levy could discourage financial intermediation, increase cash transactions, and hinder the effectiveness of the cashless policy.
Moreover, stakeholders expressed concerns about the levy’s burden on businesses, potential inflationary effects, and its contribution to the already high cost of living. They called for enhanced communication, education, and stakeholder engagement to address uncertainties and reassure the public.
As the debate continues, stakeholders underscore the importance of balancing cybersecurity efforts with economic considerations and the need to protect citizens’ financial interests.
