Peter Obi, the former presidential candidate of the Labour Party has condemned the recently announced Cybersecurity Levy, describing it as ‘‘milking a dying economy.’’
In a statement issued via his X handle on Wednesday, Obi decried the rate President Bola Tinubu’s government is increasing taxes, despite his assurances to address multiple taxation as a way of creating a conducive business environment.
The former Anambra State governor noted that Nigerians are already suffering severe economic distress orchestrated by some policies of the government, including the removal of fuel subsidies and the floating of Nigeria’s foreign exchange market.
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‘‘The introduction of yet another tax, in the form of Cybersecurity Levy, on Nigerians who are already suffering severe economic distress is further proof that the government is more interested in milking a dying economy instead of nurturing it to recovery and growth,’’ he said.
Obi highlighted several key concerns regarding its implications for businesses and the broader economic landscape of Nigeria. His remarks followed the flurry of criticism ignited by the policy, with most pointing at the urgent need for a reevaluation of fiscal policies to safeguard against unintended consequences and ensure the competitiveness of the country’s economic environment.
The two-term former Anambra State governor, who has been a vocal critic of the current government, noted the detrimental impact of the Cybersecurity Levy as a form of multiple taxation on banking transactions.
He said; ‘‘the Cybersecurity Levy does not only amount to multiple taxation on banking transactions, which are already subject to various other taxes including stamp duties but negates the Government’s avowed commitment to reduce the number of taxes and streamline the tax system.’’
Furthermore, Obi noted the disproportionate impact of the Cybersecurity Levy on businesses’ trading capital, noting that it is levied on capital rather than profits.
‘‘The imposition of a Cybersecurity Levy on bank transactions is particularly sad given that the tax is on the trading capital of businesses and not on their profit hence will further erode whatever is left of their remaining capital, after the impact of the Naira devaluation and high inflation rate,’’ he said.
Speaking further, Obi asserted that as businesses struggle to navigate economic challenges, policies that levy additional taxes on their capital undermine their ability to invest, grow, and create jobs, ultimately impeding economic recovery and development.
‘‘It is inconceivable to expect the suffering citizens of Nigeria to separately fund all activities of the government. Policies such as this not only impoverish the citizens but make the country’s economic environment less competitive,’’ he said.
Obi also questioned the rationale behind diverting funds generated from the Cybersecurity Levy to the Office of the National Security Adviser (ONSA), traditionally associated with national security rather than revenue collection.
‘‘And when did the office of the NSA become a revenue collecting center?’’ he asked. ‘‘And why should that purely national security office receive returns on a specific tax as stated in the new cybersecurity law?’’
Ultimately, Obi’s remarks reflect broader concerns within the business community and civil society regarding the implications of fiscal policies on economic growth, competitiveness, and public welfare.
Earlier this week, the Central Bank of Nigeria (CBN) issued a directive mandating financial institutions to implement a cybersecurity levy. This levy, set at 0.5% of the value of all electronic transactions, aims to bolster the National Cyber Security Fund overseen by the Office of the National Security Adviser (NSA).
According to the circular released by the apex bank, financial institutions, including banks, mobile money operators, and payment service providers, must begin deducting and collecting the cybersecurity levy within two weeks of the circular’s issuance. The levy will be calculated as 0.5% of the value of all electronic transactions, with the funds directed into the National Cyber Security Fund to enhance Nigeria’s cybersecurity capabilities.
However, this development has not been well-received by Nigerians.