KPMG, Global tax and advisory firm has criticized the federal government and Central Bank of Nigeria (CBN) on its move to implement the cybercrime levy stipulated in the 2024 Cybercrimes Amendment Act stating that no country can tax its way to prosperity.
The company while commenting on the new levy stated that there is empirical evidence to prove that higher taxes does not lead to sustainable growth and the timing of the implementation of the section of the Act is wrong considering the prevailing economic conditions in the country.
It further noted that the need for revenue mobilisation in the face of significant challenges warranted the implementation of the levy despite provisions in the Cybercrime Act since 2015 even though the current economic challenges faced by citizens does not warrant introduction of new taxes.
The firm also criticised the lack of a cost benefit analysis given multiple reports of about N3 trillion to be generated from the levy annually. It further advised that such levies should be accompanied by an adequate expenditure statement to justify them.
Furthermore, it questioned how the implementation of the act will drive financial inclusion across the country given the fear that individuals and businesses resorting to other forms of transaction.
Last week, the CBN mandated banks and Payment Service Providers (PSPs) to begin the deduction of 0.5% of the total transaction cost on online payments as cybersecurity levy to be managed by the office of the National Security Advicer (NSA).
