According to Information Minister Mohammed Idris, Nigeria has suspended the planned cybersecurity levy on local money transfers. The government instructed the suspension of its execution. In response to Nigeria’s weakening currency, authorities implemented a new Tax targeting Cryptocurrency to regulate its economic impact. Before implementing the levy, various Civil Society organisations had opposed its introduction. The Nigerian Economic Summit Group (NESG) raised issues on May 9 regarding the timing of the new 0.5 percent cybersecurity levy on electronic transactions imposed by the Central Bank of Nigeria (CBN).
Following this, it was reported that the CBN had sent a circular to various financial institutions, such as commercial, merchant, non-interest, and payment service banks, informing them of the newly introduced cybersecurity levy. The NESG released a statement calling on the federal government to review the levy in light of concerns about excessive Taxation and its impact on Inflation for country citizens. Amidst rising inflation and financial exclusion, the group highlighted that the cybersecurity levy needs to be better timed, considering the current Cost Of Living Crisis and the surge in currency circulation.
Citizens worry about the negative impact of the cybersecurity levy.
The introduction of the cybersecurity levy in the financial sector has been met with mixed reactions, with many citizens expressing concerns over its negative impact on the country’s average people. The levy, which requires financial institutions to pay a certain percentage of their annual turnover towards cybersecurity measures, is aimed at strengthening the country’s cybersecurity defences and protecting sensitive financial data from cyber threats. However, there are several reasons why this levy may ultimately have negative consequences for the country’s citizens.
Financial institutions pass on the costs of the levy to their customers in the form of fees, which makes banking services less interesting for many people in the country, particularly those who are already struggling to make ends meet. Any cost increase could significantly impact the average citizen in a country where access to banking services is essential for everyday transactions such as paying bills and receiving salaries. It also has the unintended consequence of limiting access to financial services for various people in the country.
Many small firms merge with bigger ones to meet requirements.
Another concern is that the levy may not effectively improve cybersecurity measures in the financial sector. There are fears that the funds raised through the cybersecurity levy could be mismanaged or used for purposes other than enhancing cybersecurity defences. With a history of Corruption and mismanagement in the country, there needs to be more trust in the government’s ability to ensure that the funds are used for their intended purpose. This could further decrease confidence in the financial sector and lead to a decrease in consumer trust across the country.
While the cybersecurity levy in the sector is intended to enhance cybersecurity defences and protect sensitive financial data, several reasons exist why it may ultimately have negative consequences for the country’s citizens. The levy could have far-reaching implications for the average person, from increased consumer costs to limited access to financial services and concerns over the mismanagement of funds. The government must address these concerns and ensure that the levy is implemented transparently and effectively to minimise its negative impact on citizens.
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Strengthening the country’s cyberspace is necessary because cyber threats are becoming increasingly sophisticated, and financial institutions need to invest in robust cybersecurity measures to safeguard their operations and customer data. The government can ensure that it prioritises cybersecurity and allocates resources to mitigate cyber risks. In the long run, a more secure financial sector benefits all citizens by reducing the likelihood of cyber attacks and financial fraud, ultimately contributing to a more stable and reliable banking system.