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By Chinenye Anuforo
Global tax and advisory firm, KPMG, has criticised the Nigerian government’s move to implement a 0.5 percent cybersecurity levy as mandated by the Cybercrime Amendment Act 2024.
President Bola Tinubu suspended the levy’s implementation following public outcry. However, KPMG argued that no country can achieve prosperity solely through taxation.
In a tax alert issued on Monday by Wale Ajayi, Head of Tax, Regulatory and People’s Services, the firm expressed concerns about the Act’s timing due to Nigeria’s current economic climate.
While acknowledging the government’s need for revenue to address significant challenges, KPMG highlighted that the law existed since 2015. The firm suggested that the government may be pressured to find new revenue sources.
“Research has shown that higher taxes do not lead to sustainable growth. No country can tax itself to prosperity. Perhaps, it is in recognition of this that the current administration and the Presidential Committee on Fiscal Reforms have often emphasised that the government will not introduce new taxes,” he said.
KPMG further criticised the lack of a cost-benefit analysis, considering estimates of the levy generating N3 trillion annually. The firm argues that such levies should be accompanied by a clear spending plan to justify their implementation.
KPMG also questioned how the Act’s implementation would promote financial inclusion, given concerns that individuals and businesses might resort to alternative transactions.
