In the midst of an economic crisis in Nigeria with soaring inflation, the government decided to halt a plan to implement a 0.5% levy on domestic electronic transactions to fund cybersecurity improvements, facing backlash for increasing taxes during tough times. The Central Bank of Nigeria had instructed financial institutions to collect the levy, but after public outrage, President Bola Tinubu promised to stop the tax and a senior cabinet member officially suspended its implementation
Nigeria's economic challenges include high inflation, falling international investment, and rising cost of living, making it difficult for citizens to afford basic necessities. The country's severe economic situation has impacted its growth, prompting concerns about the levy's effect on citizens. While the cybercrime levy aimed to provide dedicated funding to address cyber threats, the economic climate did not justify its implementation. The rollback comes as Nigeria strives to bolster its cybersecurity workforce and counter the nation's historical hub of cybercrime, particularly social engineering scams. In its cybersecurity outlook, Deloitte warned of a potential increase in insider-supported attacks and ransomware incidents in 2024 due to economic hardships. Nigeria's poor economy poses risks of data breaches and unauthorized access to government assets, with legacy systems vulnerable to cyber threats. The levied tax was expected to generate significant revenue for national cybersecurity capabilities, although concerns were raised about its transparency, impact on citizens' payment methods, and lack of cost justification. KPMG highlighted the importance of responsible spending practices, gradual tax reform, and government accountability in fiscal sustainability. Nigeria's decision to halt the cybersecurity tax underscores the challenges of balancing revenue generation and economic hardships amid escalating cyber risks and the need for cybersecurity advancements in the country. https://www.darkreading.com/cyber-risk/nigeria-halts-cybersecurity-tax-after-public-outrage