SERAP, BudgIT, and 136 Nigerians Sue CBN Over Cybersecurity Levy
The Socio-Economic Rights and Accountability Project (SERAP), alongside BudgIT and 136 concerned Nigerians, have initiated a lawsuit against the Central Bank of Nigeria (CBN) over its alleged failure to withdraw the cybersecurity levy.....KINDLY READ THE FULL STORY HERE▶
The plaintiffs filed the lawsuit, number FHC/L/CS/822/2024, at the Federal High Court in Lagos State, contending that the CBN’s circular dated May 6th, 2024, directing financial institutions to deduct a cybersecurity levy from customers’ accounts is unlawful and exceeds the bank’s authority.
The plaintiffs seek a determination from the court as to whether the CBN’s directive violates sections 14(2), 44(1), and 162(1) of the Nigerian Constitution and is therefore unconstitutional, null, and void.
Additionally, they demand that the CBN be restrained from enforcing the circular until the court decides on the matter.
Ebun-Olu Adegboruwa, SAN, the lawyer representing the plaintiffs, argued in the suit that “The CBN circular is unlawful and an outright violation of the provisions of the Nigerian Constitution and the country’s international obligations.”
The plaintiffs further asserted that the provisions of the Cybercrimes Act on payment of the cybersecurity levy apply only to businesses listed in the Second Schedule to the Act and do not reference bank customers, contrary to the CBN’s circular.
They urged the court to grant the requested reliefs in the public interest to prevent arbitrariness and uphold the rule of law in the country.
The cybersecurity levy, as directed by the CBN, is to be remitted to the National Cybersecurity Fund administered by the Office of the National Security Adviser. However, the plaintiffs argue that this contradicts Section 162(1) of the Nigerian Constitution, which mandates that revenues collected by or on behalf of the Government of the Federation be paid into the Federation Account.
The plaintiffs also highlighted that commercial banks in Nigeria already charge substantial fees for electronic transactions.
The hearing date for the suit has not yet been set.
Cybersecurity Levy Will Increase Tax Burden on Nigerians – Ndume
Senator Ali Ndume has condemned the proposed cybersecurity levy, saying the levy will increase the tax burden on Nigerians.
The lawmaker representing Borno South Senatorial District in the Senate stated this in an interview on Channels Television’s Politics Today.
Ndume said it is not appropriate for the government to continue to levy the citizens without increasing their income.
He said, “You cannot be loading taxes on people when you are not increasing their income.
“Their source of income, you are not widening it, you are not increasing it. I am not part of those that support levying people anyhow.”
Recall that the Cybersecurity Act was recently amended by the National Assembly.
But, Ndume said, while he supported the Act, it was regrettable that he didn’t spot the part that has placed a burden on Nigerians.
He stated, “The amendment to the Cybersecurity Act, I supported it but not the nitty-gritty and I am not trying to run away from any blame.
“We have issues with cybercrime you know that, and there is a need for the government to improve the Cybercrime Act, that is what I understand by the amendment.
“Looking at the nitty-gritty would have been the responsibility of interested parties. If I had known there is an issue where a cost would be transferred to a customer or a Nigerian I would not agree.”
Tinubu Orders Suspension of Cybersecurity Levy Implementation by CBN
President Bola Tinubu has directed the Central Bank of Nigeria (CBN) to suspend the implementation of the controversial cybersecurity levy policy and initiate a review process.
This directive follows the recent decision by the House of Representatives, which urged the CBN to retract its circular mandating all banks to apply a 0.5 per cent cybersecurity levy on electronic transactions nationwide.
According to The Punch, Sources familiar with President Tinubu’s stance on the matter said the president is cognizant of the economic challenges faced by Nigerians, particularly since the initiation of his stringent economic reforms last May. The President reportedly expressed reluctance to burden citizens with additional levies further.
Speaking anonymously, a senior official in the presidency to The Punch that, “The President is attuned to the sentiments of Nigerians and is unwilling to proceed with policies that exacerbate their burdens. Hence, he has directed the CBN to halt the implementation of the cybersecurity levy and conduct a review.”
Another presidency official, also requesting anonymity due to lack of authorization to comment on the issue, highlighted discrepancies in the enforcement of the law, which prompted the President’s intervention. “The law predates the Tinubu administration, having been enacted in 2015 under the Goodluck Jonathan administration. It is only now being enforced,” the official stated.
“Tinubu was not in office when that directive was issued, and he is keen not to appear insensitive to the plight of Nigerians. Consequently, the CBN has suspended the instruction to banks to commence charging the levy. The President’s intention is not to indiscriminately impose taxes on Nigerians, and thus, he has ordered a review of the law,” the official added.