CBN Introduces Cyber Security Levy, Directs banks to charge 0.5% on transactions

CBN Introduces Cyber Security Levy, Directs banks to charge 0.5% on transactions

The Central Bank of Nigeria has directed banks to begin charging 0.5% cybersecurity levy on transactions.

A circular released by the apex bank on Monday said the implementation of the levy would begin two weeks from the day of its announcement.

The circular was directed to all commercial, merchant, non-interest and payment service banks.

The circular revealed that it was a follow-up on an earlier letter dated June 25, 2018 (Ref: BPS/DIR/GEN/CIR/05/008) and October 5, 2018 (Ref: BSD/DIR/GEN/LAB/11/023), in compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015.

Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and under the provision of Section 44 (2)(a) of the Act, a levy of 0.5 per cent (0.005) equivalent to a half per cent of all electronic transactions value by the business specified in the Second Schedule of the Act, is to be remitted to the National Cybersecurity Fund which the Office of the National Security Adviser shall administer.

The CBN said that all banks, financial institutions and payment service providers are now required to implement the directive.

“The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy’,” it said.

“Deductions shall commence within two weeks from the date of this circular for all financial institutions and the monthly remittance of the levies collected in bulk to the NCF account domiciled at the CBN by the fifth business day of every subsequent month.”

Speaking on penalties for non-compliance, the bank said that failure to remit the levy is an offence and is liable on conviction to a fine of not less than two per cent of the annual turnover of the defaulting business, amongst others.

PRNigeria report that the new levy is statutory requirement in the amendment Cybercrime act which was signed into law by President Bola Tinubu in February 2024.

Senator Shehu Umar Buba, the Chairman of the Senate Committee on National Intelligence and Security, sponsored the amendments to the Act.

While presenting the bill for the amendment at the National Assembly in October 2023, Senator Buba sought, among other things, to correct errors contained in the principal Act and empower the NSA to monitor compliance with the Act. He stressed the complexity of interpreting and applying specific provisions of the Cybercrime Act 2015, which had stifled national cybersecurity efforts in the face of well-organized cyber syndicates and adversaries.

He pointed out that inadequate funding and lack of prioritization might undermine the gains of Nigeria’s digital economy and cybersecurity efforts. He, therefore, advocated the necessity of the amendment to address gaps and realign with changing realities.

By PRNigeria