CBN’s cybersecurity Levy ill-timed, negates financial inclusion – expert
A financial expert, Prof. Uche Uwaleke says the newly introduced 0.5 per cent charges on electronic transactions as cybersecurity levy by the Central Bank of Nigeria (CBN) is ill-timed.
Uwaleke, a professor of capital market and the president of the Capital Market Academics of Nigeria, said this in an interview with the News Agency of Nigeria (NAN) on Tuesday in Abuja.
According to him, the cybersecurity levy is ill-timed, coming at a time when the CBN is concerned about the high rate of financial exclusion and the increasing rate of currency circulating outside the banks.
He said that it carried the downside risk of discouraging financial intermediation as well as complicating the transmission of monetary policy with more people shunning the banks due to high charges.
“The end result is that it makes difficult effort by the CBN to tame inflation.
“So, I think the circular should be withdrawn, especially against the backdrop of assurances by the government that its plan to increase revenue would not include introducing new taxes or increasing tax rates.
“To this end, the government should suspend the policy while getting set to implement the recommendations of the Presidential Committee on Fiscal Policy and Tax Reforms,” he said.
He said that the mandate of the committee included streamlining multiple taxes and levies currently inhibiting the growth of businesses in Nigeria.
The direcve was contained in a circular jointly signed by the Director, Payments System Management Department, Chibuzo Efobi; and the Director, Financial Policy and Regulation Department, Haruna Mustafa.
The circular was directed to all commercial banks, merchant banks, non-interest banks, and payment service banks.
It announced that the implementation of the levy would start two weeks from May 6.
“The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution.
“The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy,’” the circular said.
However, some 16 banking transactions were exempted from the new cybersecurity levy.
They include loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, intra-bank transfers between customers of the same bank among others.
By the calculations of the new levy, five Naira will be charged on a transaction of N1,000, while N50 will be charged on a transaction of N10,000.
Others are N500 charge on a transaction of N100,000, N5,000 charge on a transaction of N1,000,000, and N50,000 charge on a transaction of N10,000,000.
The cybersecurity levy will now be added to already existing bank charges like transfer fee, stamp duty, charges on SMS, and Vat
