In response to growing concerns about the ambiguity surrounding the implementation of the recently introduced cybersecurity levy, the House of Representatives has urged the Central Bank of Nigeria (CBN) to withdraw the initial circular and provide a more clear order.
The action comes amid concerns that misreading of the circular could result in accidental compliance with the Cybersecurity Act.
The call for the circular’s withdrawal came in response to Honourable Kingsley Chinda’s motion, which highlighted the need to delay and modify the cybersecurity levy’s implementation.
Lawmakers raised concern about potential misconceptions caused by divergent interpretations of the CBN instruction and the rules specified in the Cybersecurity Act.
The CBN circular, issued on May 6, 2024, stipulates that all financial institutions levy a 0.5% fee on the value of electronic transactions, with the proceeds going to the National Cybersecurity Fund. The mandate states that financial institutions must begin deducting from electronic transactions and ensure timely reimbursement to the specified account.
However, concerns have been expressed about the circular’s clarity, notably in terms of defining qualifying transactions and enforcing compliance requirements.
Stakeholders worry that the levy’s premature introduction will increase the financial burden on businesses and limit the expansion of digital transactions in Nigeria.
Financial institutions and payment service providers are struggling with the ramifications of the new levy, which is projected to raise corporate costs and entail operational changes to maintain compliance.
Furthermore, organizations that rely on digital transactions may have increased operating costs, necessitating a rethinking of pricing strategies and cost management procedures.
As stakeholders work through the complexities of the cybersecurity levy, there is an increasing need for open communication and collaborative efforts to address concerns and streamline implementation procedures.
With the economic landscape in flux, politicians, regulators, and industry participants must collaborate to strike a balance between revenue generating and creating a favorable climate for long-term business success.