Concerns Over New Cybersecurity Levy and Tax Burden on Nigerian Businesses
In a recent statement, Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), voiced concerns over the impact of the newly introduced cybersecurity levy on businesses in Nigeria. The levy, along with a multitude of taxes imposed by various levels of government, is seen as a significant impediment to economic growth, potentially leading to job losses and sustained inflation.
Dr. Yusuf urged for a suspension of the levy and called for comprehensive stakeholder deliberation. He highlighted the hardship that the levy could inflict on citizens and investors, who are already burdened with an array of taxes such as education tax, value added tax (VAT), company income tax (CIT), and others. With additional levies like the NYSC levy and tertiary health levy on the horizon, the strain on businesses is mounting.
He pointed out that the new levy stands in contradiction to the objectives of the Presidential Committee on Fiscal Policy and Tax Reforms, which seeks to streamline taxes or taxes to foster a more conducive business environment. Dr. Yusuf emphasized that businesses and citizens are still grappling with the effects of recent reforms, high living costs, and weak purchasing power, making it an inopportune time to introduce additional financial burdens.
The CPPE CEO also raised questions about the projected revenue from the cybersecurity levy. With e-payment transactions hitting N600 trillion in 2023, a 0.5% deduction would amount to N3 trillion, surpassing the infrastructure budget in the 2024 Appropriations Act. He warned that such levies could undermine the Central Bank of Nigeria’s cashless policy initiative, potentially driving people back to cash transactions.
The backdrop to these concerns is the Central Bank of Nigeria’s recent mandate for banks and payment service providers to deduct 0.5% from electronic transactions for the National Cybersecurity Fund. This move is part of the implementation of the Cybercrime (Prohibition and Prevention etc.) Act of 2024. The CPPE’s stance reflects the broader challenges faced by firms in Nigeria, as they navigate a complex tax landscape that affects their profitability and ability to grow or create jobs.
For those looking to understand how to do your taxes, or specifically e file taxes, staying informed about such policy changes is crucial. Whether you need to file your taxes, complete an electronic tax return, or navigate
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