President Bola Tinubu has directed the Central Bank of Nigeria to suspend the implementation of the controversial cybersecurity levy policy and ordered a review.
This follows the decision of the House of Representatives, which last Thursday called on the CBN to withdraw its circular ordering all banks in the country to start charging a 0.5 per cent cyber security fee for any electronic transaction.
The CBN on May 6, 2024, issued a circular mandating all banks, mobile money operators, and payment service providers to implement a new cybersecurity levy, following the provisions laid out in the Cybercrime (Amendment) Act 2024, according to The Punch.
A fee of 0.5 per cent of all electronic transactions will be charged and remitted to the National Cyber Security Fund under the oversight of the NSA, according to the Act.
Financial institutions are required to deduct the levy on all electronic transfer origination.
The circular also stipulates a timeframe for financial institutions to reconfigure their systems to ensure complete and timely submission of remittance files to the Nigeria Interbank Settlement Systems Plc as follows: “Commercial, Merchant, Non-Interest, and Payment Service Banks – Within four weeks of the issuance of the Circular.
The circular reads “All other Financial Institutions (Microfinance Banks, Primary Mortgage Banks, Development Financial Institutions) – Within eight weeks of the issuance of the Circular,”
The Central Bank of Nigeria has stressed the need to strictly implement this mandate, warning financial institutions that they will be subject to serious sanctions if they do not fulfill it. By the Act, a minimum fine of 2 % of an annual turnover is imposed on noncompliant entities if they are found guilty.
The circular sets out a list of transactions that are currently considered eligible for exemption.
These are loan disbursements and repayments, salary payments, intraaccount transfers within the same bank or between different banks for the same customer, and intrabank transfers between the same bank’s customers.
Exemptions apply to other financial institutions transfers to correspondent banks, interbank placements, bank transfers to CBN and vice versa, interbranch transfers within a bank, cheque clearing and settlement, letters of credit, and bank recapitalisation funding.
Others are savings and deposits, including transactions related to longer-term investments such as treasury bills, bonds, business papers, or public social welfare programmes.
The introduction of the new controversial levy has been heavily criticized by citizens, and stakeholders alike, as it is expected to raise the cost of conducting business in Nigeria and could potentially hinder the growth of digital transaction adoption.
