By Milcah Tanimu

KPMG, a global tax and advisory firm, has voiced criticism against the federal government and the Central Bank of Nigeria (CBN) for their decision to implement the cybercrime levy outlined in the 2024 Cybercrimes Amendment Act. The firm argues that taxing alone cannot lead a country to prosperity, citing empirical evidence that higher taxes do not necessarily foster sustainable economic growth. Additionally, it deems the timing of the levy’s implementation as inappropriate, considering the current economic challenges facing Nigeria.

Despite acknowledging the government’s need for revenue mobilization amid significant hurdles, KPMG questions the necessity of introducing new taxes, particularly given the prevailing economic hardships experienced by citizens. The firm emphasizes that the introduction of such levies should be accompanied by thorough cost-benefit analyses and transparent expenditure statements to justify their imposition.

KPMG also highlights the absence of a formal cost-benefit analysis regarding the estimated annual revenue of about N3 trillion expected from the levy. It underscores the importance of such analysis to provide clarity on whether the benefits of the levy outweigh its costs.

Furthermore, the firm raises concerns about the potential impact of the levy on financial inclusion efforts, fearing that individuals and businesses may resort to alternative transaction methods to avoid the levy’s implications.