The Central Bank of Nigeria (CBN), has issued a directive to all banks, instructing them to initiate the implementation of a 0.5 percent cybersecurity levy on every electronic transaction conducted within the nation.
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 signed by the Director, of the Payments System Management Department, Chibuzo Efobi, and the Director of, the Financial Policy and Regulation Department, Haruna Mustafa.
It was directed to all commercial, merchant, non-interest, and payment service banks, among others; noted that the implementation of the levy would start two weeks from Monday, May 6, 2024.
While the levy is to be charged on all electronic transactions and applied at the point of transfer origination, the CBN in an appendix to the circular, listed 16 transactions exempted from the levy. According to the banking regulator, these transactions are as follows;
- Loan disbursements and repayments
- Salary payments
- Intra-account transfers within the same bank or between different banks for the same customer
- Intra-bank transfers between customers of the same bank
- Other Financial Institutions (OFIs) instructions to their correspondent
- Banks Interbank placements
- Banks’ transfers to CBN and vice-versa
- Inter-branch transfers within a bank
- Cheques clearing and settlements
- Letters of Credits (LCs)
- Banks’ recapitalization-related funding – only bulk funds movement from collection accounts
- Savings and deposits including transactions involving long-term investments such as Treasury Bills, Bonds, and Commercial Papers.
- Government Social Welfare Programs transactions e.g. Pension payments
- Non-profit and charitable transactions including donations to registered nonprofit organizations or charities.
- Educational Institutions transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions.
- Transactions involving the bank’s internal accounts such as suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.
Nigerian’s Reaction To The Cybersecurity Level
In the wake of the cybersecurity levy announcement, there has been an ongoing stream of reactions. Even though the levy was included in the Cybercrime Act of 2015, which was revised this year but remained dormant until recently, Nigerians are expressing concerns about the timing.
Reacting to the announcement via a post on the social media platform, X, the Founder and CEO of House of Lunettes, Mr. Akin Olaoye, said:
A ‘Cybersecurity Tax’ to fund the NSA whose expenditures aren’t audited is highly misguided. Where Inflation and a bad economy are causing hardships, making it a wrong time to impose new taxes on Nigerians
A serial tech entrepreneur, Mr. Victor Asemota, said it would have been better for the government to allow telecom operators to increase their tariffs, which would yield more taxes, than introducing the cybersecurity levy.
The government is raising their taxes but telling telcos not to raise their tariff. Wouldn’t they make more money taxing a telco price increase than this meaningless fee?” he said.
Also reacting to the levy, another X user identified as Uncle Jay, wrote:
The 0.50% charge is too much and stupendous. Imagine paying a whopping N25,000.00 for a N5 million transaction. That is too much. If they wanted this Cybersecurity fee, they could have made it a flat fee of 2 naira only for transactions from N10k and above
A user, Chainitator, tweeting as @Chainitator, wrote,
What are these people turning Nigerians to? They’ve added all kinds of deductions to my account. What is a cybersecurity levy? This is extortion. It’s always the banks’ responsibility to protect people’s money and information. Why is this administration interfering? This is criminal
A user, A. sanwo, with the username @O_sanwoabiola, stated,
A leopard never changes its spots. This administration will tax with everything in their capacity
Another user on X, Realdentro®, tweeting as @sunnshyn01, opined that the 0.6 percent levy could have been much reduced.
He wrote;
A whopping 0.5% for just levy in this current economy? Come on, this is too much. This shouldn’t be more than 0.02% if you must collect from the common man. This APC government keeps introducing charges, raising bills and all sorts of things. This is not nice at all and should be challenged in court seriously
