CBN Mandates 0.5% Cybersecurity Levy on Electronic Transactions
By Patience Ikpeme
In a move aimed at bolstering the fight against cybercrime, the Central Bank of Nigeria (CBN) has issued a circular activating a new levy on electronic transactions.
The levy, set at 0.5% (half of one percent) of the transaction value, will be collected and remitted to the National Cybersecurity Fund (NCF) for administration by the Office of the National Security Adviser (ONSA).
This action follows the recent enactment of the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024. The CBN’s circular, dated May 6, 2024, references directives and public engagements by the ONSA, highlighting the importance of compliance with the amended Act.
The levy applies to a broad range of electronic transactions, but excludes specific categories to avoid multiple applications. The following transactions are exempt from the levy: Loan disbursements and repayments; Salary payments; Intra-account transfers; Transactions involving educational institutions (tuition payments, etc.); Intra-bank transfers between customers of the same bank.
Others are: Transfers between Other Financial Institutions (OFIs) and their correspondent banks; Interbank placements; Bank transfers to and from the CBN; Inter-branch transfers within a bank; Cheque clearing and settlements; Letters of Credit (LCs); Banks’ recapitalization related funding (bulk funds movement from collection accounts); Savings and deposits (including transactions involving long-term investments); Government Social Welfare Programmes (e.g., pension payments); Non-profit and charitable transactions (donations to registered organizations) and Transactions involving banks’ internal accounts
Financial institutions will be responsible for deducting the 0.5% levy at the point of electronic transfer origination. The deducted amount will be reflected in the customer’s account with a narration: “Cybersecurity Levy.”
Deductions will commence within two weeks of the circular date (May 6, 2024) and financial institutions are required to remit collected levies monthly to the NCF account by the 5th business day of every subsequent month. System reconfigurations must be completed to ensure timely submission of remittance files to the Nigeria Interbank Settlement System (NIBSS) Plc.
The CBN noted that failure to remit the levy is considered an offence. Penalties for non-compliance include fines of not less than 2% of the annual turnover of defaulting businesses.
The CBN’s action is a significant step towards strengthening Nigeria’s cybersecurity defenses. The collected funds will be used to support various initiatives aimed at preventing and combating cybercrime, ultimately protecting financial institutions and citizens engaged in electronic transactions.
