KPMG Nigeria has become the latest high-profile organization to kick against the recently introduced cybersecurity levy imposed by the Federal Government.
The global Audit, Tax and Advisory services firm warned that the time was not right for the introduction of the levy and called for a rethink on the matter due to current economic climate.
Speaking on the directive in its latest tax alert issue, KPMG said this is certainly “not the right time to implement this levy”.
The firm added that although the idea was not new, it was unjustified under the prevailing economic condition.
KPMG 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.
However, KPMG said higher taxes do not lead to sustainable growth, adding that no country can tax itself to prosperity.
According to the firm, unintended consequences of any measure must be thoroughly evaluated before implementation.
“Undoubtedly, Nigeria faces a significant revenue challenge. This has, therefore, constrained, and continues to constrain, the country’s capacity for achieving sustainable growth,” KMPG said.
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“Given this context, the government may go to any length to mobilise the required revenue.
“Perhaps, it is in recognition of this that the current administration and the Presidential Committee on Fiscal Reforms have often emphasized that the government will not introduce new taxes. Though the cybercrime levy is not new as it has been in existence since 2015, the question is why implement it now given the prevailing economic challenges?
“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.”
“Hopefully, the government will reconsider delaying the implementation of the levy, which has been in the books since 2015.
“Government should focus on tax reforms that address revenue leakages and be financially prudent in the utilisation of public funds.
“Combining revenue-raising initiatives with responsible spending practices is essential for fiscal sustainability.”
By: Babajide Okeowo
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