On May 6, 2024, the Central Bank of Nigeria (CBN) ordered banks to begin the process of deducting cybersecurity levy which will be administered by the Office of the National Security Adviser (NSA).
This was disclosed in a circular to different categories of banks, mobile money operators, payment service providers, and others signed by the apex bank’s Director of Payments Systems Management, Chibuzor Efobi, and Director of Financial Policy and Regulation, Haruna B. Mustafa.
According to the circular, the deduction and collection of the cyber security levy is the sequel to the enactment of the 2024 Cybercrime (prohibition, prevention, etc) Amendment Act of 2024, which provides for a 0.5% deduction of the value of all electronic transactions to the National Cyber Security Fund, which would be administered by the office of the NSA.
Furthermore, the circular noted that the deduction would be described as Cybersecurity Levy and the relevant financial institutions should begin deduction in two weeks following the secular.
It stated,
With the announcement of the levy, some Nigerians are wondering whether the rate to be deducted is 0.005% or 0.5%.
The 2015 Act is currently being replaced by the Cybercrimes (prohibition, prevention, etc) (Amendment) Act, 2024.
In the new act, the provisions of Section 44 of the principal act were amended, nullifying the previous regulation.
The amended act did not only state the decimal value of the levy (0.005) like the previous one, but it also introduced the percentage equivalent (0.5%) of the levy. Therefore, the levy is not 0.005% but 0.5%.
Speaking with Nairametrics, a legal practitioner based in Abuja, Damilola Victoria Alabi, said:
Meanwhile, the Nigeria Labour Congress (NLC) has opposed the Central Bank of Nigeria (CBN)’s directive for all financial institutions to impose a 0.5% cybersecurity tax on every electronic transaction.
In a statement on Tuesday, NLC President, Joe Ajaero, criticized the directive, calling it “an additional burden on hardworking Nigerians.”
Ajaero also demanded that the policy be reversed and a new cybersecurity measure that does not impose another financial burden on the Nigerian people be introduced.
Also, the Centre for the Promotion of Private Enterprise, (CPPE) criticized the law stating that the newly introduced cybersecurity levy and other numerous taxes imposed by federal, state, and local governments in Nigeria are impeding the capacity of businesses to drive economic growth, leading to job losses and inflation across the country.
Optics: The Central Bank of Nigeria’s directive on the new cybersecurity levy highlights an essential update in the country’s financial regulatory framework.