Nigeria suspends controversial money transfer levy 

For the second time in just over a year, the Nigerian government has thought better of a plan that would, effectively, tax users of mobile communications: this time it’s a levy intended to raise money to enhance cybersecurity.

The planned levy on domestic money transfers to fund cybersecurity has now been suspended. The idea was that all banks and mobile money operators would be obliged to charge 0.5% of the value of electronic transfers as part of efforts to fund cybersecurity. Announcing this, the central bank had targeted 20 May as the start date.

According to Reuters, the perceived need for the new levy seems partly to be down to cryptocurrency, which authorities have blamed for Nigeria's currency weakness. Indeed, Reuters says the Nigerian naira has hit record lows due to dollar shortages as crypto transactions in the country have flourished.

However, it’s that weakness that has caused a backlash against the planned levy, as we reported last week. There has been widespread public criticism of the scheme as the cost of living rises and the value of the official currency falls.

Not too surprisingly therefore, the Information Minister Mohammed Idris announced on Tuesday that the government had decided to put the cybersecurity tax policy implementation on hold.

A similar fate befell a proposed five per cent excise duty on telecommunications in 2023.

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