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E-Transactions: CBN says implementation of 0.5 Percent ‘Cybersecurity Levy’ begins in 2 weeks, lists exemptions

Dr.Olayemi Cardoso, Governor of CBN

*The Central Bank of Nigeria says a levy of 0.5 percent (0.005) equivalent to a half percent of all electronic transactions value by the business specified in the Second Schedule of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 is to be remitted to the National Cybersecurity Fund, and will be administered by the Office of the National Security Adviser

Isola Moses | ConsumerConnect

The Central Bank of Nigeria (CBN) has disclosed the implementation of the newly-introduced ‘Cybersecurity Levy’ on consumers’ electronic (e-transactions) will commence after two weeks from the date of the circular it dated and issued Monday, May 6, 2024.

ConsumerConnect reports the Bankers’ Bank in the circular had directed the country’s Deposit Money Banks (DMBs) to start charging 0.5 percent ‘Cybersecurity Levy’ on electronic transactions by consumers of financial products and services.

The CBN issued the directive to all commercial, merchant, non-interest and payment service banks as well as Mobile Money operators and payment service providers in Nigeria.

The Bank stated: “Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and pursuant to the provision of Section 44 (2) (a) of the Act, ‘a levy of 0.5% (0.005) equivalent to a half percent 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 (NCF), which shall be administered by the Office of the National Security Adviser (ONSA).”

The CBN also noted: “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’.

“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.”

It is also recalled the Bank recently stopped Financial Technology firms (FinTechs), such as Opay and Palmpay from onboarding new customers, just as it directed banks to deduct 0.375 percent Stamp Duty charge on all mortgaged-backed loans and bonds in the country’s banking and finance system.

Categories of transactions exempted from ‘Cybersecurity Levy’

As regards the categories of transactions exempted from the Cybersecurity Levy, the Central Bank of Nigeria listed these to include 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.

Also exempted from the levy were inter-branch transfers within a bank, cheque clearing and settlements, ⁠Letters of Credits, ⁠Banks’ recapitalisation-related funding only bulk funds movement from collection accounts, savings and deposits including transactions involving long-term investments, among others.

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