Business

CBN Stops 0.5% Cybersecurity Levy on Electronic Transactions

Published by Tope Fakinlede on May 20th, 2024.

CBN Stops 0.5% Cybersecurity Levy on Electronic Transactions

The Central Bank of Nigeria (CBN) has instructed banks and other financial institutions to cease the 0.5 percent cybersecurity charges on electronic transactions.

This directive was communicated through a circular addressed to commercial, merchant, non-interest, payment service banks, other financial institutions, mobile money operators, and payment service providers. The circular was signed by Chibuzor Efobi, Director of Payments System Management, and Haruna Mustafa, Director of Financial Policy and Regulation Departments at the CBN.

The decision was influenced by a directive from the House of Representatives and the federal government, instructing the CBN to suspend the 0.5 percent cybersecurity levy on transactions.

Previously, the CBN had issued a circular based on the Cybercrime (Prohibition, Prevention, etc.) (Amendment) Act 2024. According to Section 44 (2)(a) of the Act, businesses specified in the Act’s second schedule were to remit a levy of 0.5 percent of all electronic transaction values to the National Cybersecurity Fund (NCF), managed by the Office of the National Security Adviser (ONSA).

The Act established the National Cybersecurity Fund, with contributions coming from various sources including the specified levy on electronic transactions, grants from donor agencies, contributions from individuals and organizations, appropriations by the National Assembly, and other accruing assets. Funds directed to the NCF are exempt from income tax, encouraging contributions, which are also tax-deductible.

Businesses identified under the Act were required to remit the levy within 30 days, ensuring a streamlined funding process. The Act also permitted up to 40 percent of the Fund to be allocated to programs aimed at countering violent extremism (CVE).

Cybersecurity involves protecting computer systems, networks, programs, and data from digital attacks, unauthorized access, damage, or theft. It includes various technologies, processes, and practices designed to safeguard information and ensure data confidentiality, integrity, and availability.