Cybercrime Levy Imposed by CBN Simply a Tax To Fund Parastatals, Says Financial Analyst Obi-Chukwu

In a recent development following the Central Bank of Nigeria’s imposition of a 0.5% cybersecurity levy on electronic transactions to combat cybercrime, founder and chief Analyst of Nairametrics, Ugodre Obi-Chukwu said it is one of the taxation measures of the government put in place to sustain certain parastatals.

Speaking in an interview on ARISE NEWS, Obi-Chukwu shedding light on the implications of such taxation measures, aid it comes as a result of a strain in the nations revenue generation

“On the CBN’s 0.5% levy on bank transactions to fight cybercrime, It’s a tax. I think this is not a new law, I think all they are doing now is just implementing the law that was passed, maybe 3-4, maybe five years ago if I’m not mistaken. It is not a very recent thing and I think you’re likely going to see a lot of that happen. I was in some forum recently and I heard even the last National Assembly passed several laws that have tax implications.

“Let me give you an idea of how Nigerian laws are passed. Like so, when we set up a new body, a new parastatal, a new government agency and things like that, lawmakers have a way of asking themselves one very good question. How do we fund these agencies? How does this agency sort of fund itself? So, they have got to try and make it independent, and so they now weave in one, charge or give them one power to collect one levy.

“That’s the conventional way of writing legislation here. so, if you go and look at nearly every legislation you have that sets up a set of parastatals, they all have one kind of hidden tax here and there. That’s what this is. Do I like it? Of course not. But you are in interesting times where revenues are completely strained. These things need to happen, but someone has got to pay for it and that’s what’s going on here. Government is not going to pluck that money; it has got to be through taxation.”

Further speaking, the Analyst emphasised forex’s crucial role in shaping the naira’s path, urging swift action to strengthen reserves and attract capital.

“The CBN captured it at the spring meeting when he said you’re going to see volatility. I mean this is essentially a free market. There’s no fixed exchange rate anymore, so you’re never going to see the naira stable. So, you’re going to sell this volatility for a while. The turnover you’re seeing here, maybe it’s a blip because I mean it’s kind of unusual for that sort of low number this period. But I think for me, what I always say is, look at how we’re able to attract forex. If we can’t attract $10 billion dollars in Fx this year, I would have to bet against the naira.

“There are just no two ways about it. In fact, if you can’t attract 5 billion dollars between now and mid year June. I’ve got to bet against the naira, because it’s going to be difficult to think that the currency will be stable because you don’t expect the Central bank to burn through reserves to try and defend that currency. So, what we should be asking those in government, particularly the Ministry of Finance is how they are going to attract capital. What are you doing through your agencies? That’s what we need. So, all this, jumping around the world, It’s going to be one year on May 29. So, how much have you brought in? All these pains were going through, high interest rates just so that we can see, exchange rate stable, It’s got to count for something.”

Chioma Kalu

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