Senator Shehu Umar Buba, Chairman of the Senate Committee on National Security and Intelligence, said the cybersecurity levy announced by the Central Bank of Nigeria (CBN) was not targeted at individuals or ordinary bank customers.

Buba, who sponsored the amendment bill, told Economic Confidential that the levy is aimed at financial institutions and telecommunication companies as they are vulnerable to financial crimes and cyber fraud.

The lawmaker noted that the relevant section of the Cybercrime Act is very clear about the businesses that are required to pay the tax.

“The Act is explicit about who is responsible for the payment, not citizens. The relevant Section of the Cybercrime Act 2015 listed the businesses required to pay the levy: Telecommunications Companies, Internet Service Providers, Banks, Insurance Companies, Nigerian Stock Exchange, and other Financial Institutions.

“The organisations in the sectors have been listed in previous circulars by the Central Bank of Nigeria, especially in 2018. The new circular by the CBN further provided many exemptions,” the Senator added.

On the amount payable as cybersecurity levy, he said: “It is either 0.005 or 0.5% arithmetically. The figure in the principal act was 0.005 as a fraction, which was converted to the percentage that became 0.5% in the amendment. Therefore, the statistics in fractions and percentages are the same.”

The legislator highlighted that the passage of the amendment bill was a joint effort between the government and various stakeholders.

“During my presentation of the bill at the Senate last year, I expressed concern over the country’s annual loss of $500 million caused by cybercrime, including hacking, identity theft, cyber terrorism, harassment, and internet fraud.

“The passage of the amendment bill was a collaborative effort involving the government, industry players, civil society, and academia. They participated in the public hearing before the endorsement by the two chambers of the National Assembly.

“After rigorous processes, President Bola Ahmed Tinubu signed the bill into law in February 2024. The amendment is a comprehensive legal framework that will deter, investigate, pursue, and prosecute cybercriminals, among other security and economic benefits”

The Senator, however, acknowledged the concerns of Nigerians and civil groups about the current economic situation but assured that implementing the cybersecurity law was not meant to punish the people.

The Cybercrime Act 2024 imposes a 0.5 percent (0.005) levy equivalent to half the value of all electronic transactions by the businesses specified in the Second Schedule of the Act. The tax will be remitted to the National Cybersecurity Fund, under the Office of the National Security Adviser (ONSA).

A circular issued by the CBN confirmed the exemption of certain transactions, including loan disbursements and repayments, salary payments, intra-account transfers, among others.