The recent suspension of the proposed cybersecurity levy by the Federal government has drawn reactions from the business community in Nigeria. Gabriel Idahosa, the President of the Lagos Chamber of Commerce and Industry (LCCI), has urged caution in the implementation of such levies, emphasizing the need for a thorough review of laws to avoid unintended consequences.
In an interview with Arise TV on Tuesday, Idahosa pointed out that while the Central Bank of Nigeria (CBN) may have conducted an internal review of the law, there remains uncertainty about the extent of the review.
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He said, “It is very possible that a very detailed review of the law was not done in-house in CBN. It is possible they did that and are convinced that what they did is right, but they don’t want to react now.”
Idahosa argued against the trend of introducing levies for various purposes, highlighted the challenges associated with managing public finance in the country.
“The conversations are of two levels. There is a micro level of the Cybersecurity Act itself, then there is a macro level of how you fund government activities. It is not really possible to begin to raise money for every little thing in government,” he stated.
“The whole approach in recent times of trying to draft levy for every little thing is simply not the way to manage public finance in any country. The business of raising revenue for the government is assigned to a specific organisation in government which is the Federal Inland Revenue services in the case of Nigeria. It is the business of the FIRS, mandated to generate revenue for all the services of the government of Nigeria,” he added.
Idahosa emphasized the role of the Federal Inland Revenue Service (FIRS) as the designated body responsible for revenue generation for all government services, calling for a concerted effort to strengthen its capacity. He also stated that less than 40% of taxable persons are currently taxed in Nigeria, indicating a significant gap in revenue collection.
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The LCCI President also spoke about the challenges associated with tax collection by the FIRS, highlighting the need to identify taxpayers in remote villages in the country and collecting taxes from them.
He said: “The primary challenge is that for many years, thanks to the oil boom, the government did not pay real attention to taxation in the way it is organised, because the first level of taxation is identifying economic actors at all levels, right to the remotest village. That is the first thing. The capacity of the FIRS to reach taxpayers across the country was not built over time.”
“Every country that wants to collect tax, you have to go very granular. Every business that exists in every village must have to pay tax and that is where FIRS is moving now. If we can get at least 80% of every taxable organisation and individuals in Nigeria paying taxes, we would have enough revenues to address what we want to do.”
