Progressive Shareholders Sue FG Over 0.5% Cybersecurity Levy

The Progressive Shareholders Association of Nigeria (PSAN) challenged the constitutionality of the 0.5% cybersecurity levy imposed by the Central Bank of Nigeria (CBN) at the Federal High Court, Lagos.

The apex bank had earlier this month directed all financial institutions in the country to begin the deduction of cybersecurity levy on all electronic transactions effective May 20.

The CBN first issued the directive in 2018.

The deductions were to be effected on all electronic transactions undertaken through commercial banks, merchant banks, non-interest banks, payment system banks, Other Financial Institutions (OFIs) mobile money operators, and payment service providers.

The funds were to be remitted to the National Security Fund administered by the Office of the National Security Adviser (ONSA).

President Bola Tinubu on May 14 suspended the implementation of the cybersecurity levy following backlash from Nigerians.

In the suit No. FHC/L/CS/866/2024 filed by their counsel, Olisa Agbakoba (SAN), the shareholders challenged the introduction of the cybersecurity levy on five grounds.

They argued that the National Assembly enacted the Cybercrimes (Prohibition, Prevention, etc.) Amendment Act 2024 to bypass the constitutional provision regarding public revenues to be remitted into the Federation Account and appropriated in line with the Constitution.

According to the shareholders, Cybercrimes (Prohibition, Prevention, etc.) Act 2024, in section 44(2)(a) mandates a levy of 0.5% of electronic transactions of all bank customers to be deducted by commercial banks and payment services banks and remitted to the National Cybercrimes Fund domiciled with the Central Bank of Nigeria, to be administered by the Office of the National Security Adviser.

The plaintiffs insisted that Section 162 of the 1999 Constitution of the Federal Republic of Nigeria (as amended) provides for the collection and domiciliation of public revenue into the Federation Account and its appropriation as prescribed by the Constitution. Section 59(1) of the 1999 Constitution (As Amended) requires approval from the National Assembly for all expenditure of public revenues, to be included in the annual Appropriation Bill.

“By Sections 59 and 162 of the Constitution, all expenditure on public revenues, must be included in the annual Appropriation Bill laid by the President and approved by the National Assembly.”

“Also, any laws made by the National Assembly that creates revenues, and prescribes their administration, disbursement, and direct their spending and bypassing the requirement of legislative approval, are null and void,” they stressed.

The National Assembly and the Attorney General of the Federation were listed as respondents in the suit.

However, no hearing date has been fixed for the hearing of the case.