Amidst widespread public criticism over increasing taxes during an economic downturn, the Nigerian government has decided to halt its plans to finance national cybersecurity enhancements through a 0.5% levy on domestic electronic transactions.
Initially, the Central Bank of Nigeria had instructed financial institutions to commence the collection of the levy by May 6. However, following significant public outcry, President Bola Tinubu vowed to block the tax, leading to the official suspension of its implementation by a senior cabinet member on May 14.
“The cybersecurity tax policy implementation has been directed by the government to be put on hold, so it has been suspended,” stated Information Minister Mohammed Idris, as reported by Reuters.
Nigeria, one of Africa’s top three economies, is currently grappling with its most severe economic crisis in decades, marked by annual inflation surpassing 30%, dwindling international investment, and escalating living expenses. With ordinary citizens bearing the brunt of these economic challenges, the proposed cybersecurity tax faced vehement opposition.
Wale Ajayi, a partner at consultancy KPMG, emphasized the need to acknowledge Nigeria’s economic constraints in advancing its national cybersecurity agenda. He highlighted that while the cybersecurity levy aimed to provide dedicated funding to combat cyber threats, the prevailing economic climate did not justify its immediate implementation.
Amidst the economic turmoil, Nigeria continues to confront cybersecurity risks, aiming to bolster its cybersecurity workforce through initiatives like the Virtual Cyber Hub and the Cybersafe Foundation. However, the poor economy poses challenges, potentially leading to a surge in cyber-related financial crimes, according to consultancy Deloitte’s Nigeria Cybersecurity Outlook 2024.
With ransomware attacks on the rise and government assets vulnerable to exploits, the rollback of the cybersecurity levy raises concerns about Nigeria’s ability to effectively address cybersecurity threats.
Originally proposed in 2015, the cybersecurity levy aimed to strengthen Nigeria’s cybersecurity capabilities. However, the lack of cost justification and fears of adverse effects on electronic transactions prompted the government to suspend its implementation.
Moving forward, Ajayi stressed the importance of transparency, accountability, and gradual tax reforms to ensure fiscal sustainability and minimize economic shocks.
Source: darkreading.com
