Impact of Proposed Cybersecurity Levy on Businesses and Households in Nigeria

The proposed cybersecurity levy by the federal government may result in a tax burden of N1.5 trillion on businesses and households in Nigeria, according to leading accounting firm Kreston Pedabo. The Senior Partner at Kreston Pedabo, Killian Khanoba, expressed concerns about the potential impact of the levy on the economy and financial inclusion efforts.

Despite the increase in electronic transactions, Khanoba warned that the levy could lead to higher transaction and financing costs for businesses and individuals. He highlighted the potential negative effects on small businesses, who may resort to conducting transactions in cash due to rising charges associated with electronic transactions.

Khanoba also questioned the wisdom of introducing a new levy at this time, suggesting that the government should consider increasing existing levies instead. He emphasized the importance of aligning the levy with the overall tax framework of the nation and urged for a total reform of the VAT system to benefit the economy.

The implementation of the cybersecurity levy, as proposed by the Central Bank of Nigeria, could have far-reaching implications for the business environment in the country. With ongoing discussions about reducing the number of taxes in Nigeria, the introduction of a new levy at this time raises concerns about its impact on the economy and investment decisions.

Overall, the cybersecurity levy proposal has sparked debate about its potential effects on businesses, households, and the economy as a whole. The need for careful consideration and alignment with existing tax frameworks is crucial to ensure sustainable economic growth and financial stability in Nigeria.