Global audit and tax firm, KPMG Nigeria has advised the federal government to reconsider the implementation of the recently introduced 0.5 per cent cybersecurity levy on electronic bank transactions, pointing out that it is ill-timed in view of prevailing economic realities.
The firm said the charging of the levy can commence when the economic climate improves.
It pointed out that even though the idea is not new, it is unjustified under the prevailing economic condition.
KPMG further said the key objective of the cybercrime levy is to ensure that there is dedicated and adequate funding available to address the growing threats of cyber-attacks, but added that higher taxes do not lead to sustainable growth and no country can tax itself to prosperity.
It said the unintended consequences of any measure must be thoroughly evaluated before implementation.
“The timing of any reforms is essential to the success of such reforms. This underscores the current public resistance to the implementation of the levy.
“Hopefully, the National Insurance Commission (NAICOM) and the Nigerian Communications Commission (NCC) will consider this before introducing their guidelines with respect to those businesses under their purview.
“However, consideration must be given to the country’s prevailing economic conditions. The current economic climate does not justify its implementation now,” it stated.
KPMG advised the federal government to focus on reforms that address revenue leakages and be financially prudent in the utilisation of public funds.
It further pointed out that combining revenue-raising initiatives with responsible spending practices is essential for fiscal sustainability.
Going forward, KPMG said it is important that the government consider phasing in tax reforms on a gradual basis to minimise potential shocks to the economy.
