The House of Representatives has directed the Central Bank of Nigeria (CBN) to withdraw its circular directing banks to start deducting a cybersecurity levy on all electronic transactions from Nigerians.
This is coming on the heels of public outcry against cyber security levy by the organised labour, associations of several professional bodies and commercial ventures, and individuals.
The lawmakers said the apex bank misinterpreted the provisions of the Act and should immediately issue an unequivocal circular in line with the letter and spirit of the law.
The levy of 0.5% on all electronic transactions, according to Section 44 of the Cybercrimes (Prohibition, Prevention, Etc) Amendment Act 2024, was expected to be remitted by businesses and regulators listed in the second schedule of the Act to fund the National Cybersecurity Fund to be domiciled in the CBN, and administered by the Office of the National Security Adviser (ONSA).
Section 44(1) and (2)(a) of the Act (as amended) state that: “There is established a fund, which shall be known as the National Cyber Security Fund. (2) There shall be paid and credited into the Fund established under subsection (1) of this section and domiciled in the Central Bank of Nigeria: (a) a levy of 0.5% (0.005) equivalent to a half per cent of all electronic transactions value by the business specified in the Second Schedule to this Act”; and subsection (6) of the same Section 44 states that “The Office of the National Security Adviser shall administer, keep proper records of the accounts, and shall ensure compliance monitoring mechanism.”
The businesses and regulators, according to the Second Schedule of the Act, are GSM service providers and all telecommunication companies; Internet service providers; banks and other financial institutions; insurance companies; and the Nigerian Stock Exchange.
The fund is expected to be used to establish and run the National Computer Emergency Response Team (CERT) Coordination Centre, which will be responsible for managing cyber incidents in Nigeria.
But following the directives by the CBN on Sunday for banks to commence the deduction and remittance of cybersecurity levy, Nigerians across different spectrums rejected the levy, describing it as an additional burden on them. The Nigeria Labour Congress (NLC) had also joined other civil society organisations in the country to reject what they described as the government’s “insensitivity” to the plights of Nigerians.
Thus, at the plenary of the House of Representatives yesterday, the lawmakers resolved to, and called on the CBN to suspend the directive following a motion moved by the Minority Leader, Kingsley Chinda (PDP, Rivers).
It would be recalled that the member representing Darazo/Ganjuwa Federal Constituency of Bauchi State, Mansur Manu Soro, presented a similar motion on Wednesday, but was overruled by the Speaker, Abbas Tajudeen, who said that the leadership of the House would first discuss the issue.
But while moving a similar motion yesterday, Chinda noted that Nigerians are currently battling with the removal of petroleum, energy, and other subsidies, hence the inappropriateness of the imposition of another levy under any guise.
“The wording of the CBN Circular leaves the CBN directive open 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) and the Second Schedule to the Cybercrimes Act, which specifies the businesses that should be levied accordingly.
“Unless immediate pragmatic steps are taken to halt the proposed action of the CBN, the Cybercrime Act shall be implemented in error at a time when Nigerians are experiencing the aftermath of multiple removals of subsidies from petroleum, electricity, and so on, amidst rising inflation”, he said.
The House adopted the motion and directed the CBN to withdraw the ambiguous circular and issue an unequivocal circular in line with the letter and spirit of the law.
The House equally directed its committees on banking regulation and other ancillary institutions to guide the CBN properly.
Why we took this decision – Reps dep spokesman
Speaking with Daily Trust on the rationale behind the decision of the House, the Deputy Chairman, House Committee on Media and Public Affairs, Philip Agbese, said the decision was taken in response to the outcry by Nigerians.
He said the 10th House of Representatives, which is christened “The People’s House,” is all out to work for the welfare and wellbeing of the Nigerian people.
“It’s pathetic. We sympathise with Nigerians. We know that the House has been particular about the issues of revenue, but at the same time, we want to ensure that nobody is unnecessarily taxed as a citizen. These are our objectives,” he said.
When asked why the parliament is rejecting the implementation of the Act at this time when it is the same parliament that passed the law in the first instance, he said: “We are carrying out other legislative activities on that law as it stands today; I wouldn’t want to pre-empt what the committee is going to do in that regard. Nevertheless, I think the outcry is generally about the timing.”
Cybersecurity: Falana supports Reps position; another SAN says provision unconstitutional
Supporting the lawmakers’ position, human rights lawyer Femi Falana (SAN), said that the levy was not meant for individuals.
In a statement issued yesterday, Falana said the CBN wrongly interpreted the provisions of the Cybercrime (Prohibition, Prevention, etc.) Amendment Act 2024.
“Even though the said levy of 0.5 per cent is payable by the businesses listed in the second schedule to the principal Act, the CBN has wrongly directed all financial institutions to apply the levy at the point of electronic transfer origination and that the amount is to be explicitly noted in customer accounts under the description ‘Cybersecurity Levy’ and remitted by the financial institution,” he said.
He said further: “The erroneous interpretation might have arisen from the substitution of ‘businesses’ for ‘business’ in the amendment.”
Earlier, another senior advocate, Kunle Adegoke, described Section 44 of the Act that the CBN relied on to order the deduction of the cybersecurity levy as unconstitutional.
The lawyer said Section 44 of the Act relied upon by the CBN was at variance with Section 162 of the Constitution and that it is trite law that wherever a law contradicts the Constitution, the Constitution takes precedence.
He said, “The implication is that no arm of government, no agency of government, or the National Assembly itself cannot appropriate such revenue to do anything else or to achieve any other goal until it goes first into the federation accounts.
“If Section 44 of the Cybercrime Act is now unconstitutional by virtue of saying that levies collected shall go into an account other than the federation account, then the directive of the CBN saying that levies to be collected shall be implemented by the National Security Adviser will equally be unconstitutional. You cannot build something on nothing. It will collapse.”
