Tinubu orders CBN to suspend implementation of cybersecurity levy

President Bola Tinubu has asked the Central Bank of Nigeria, (CBN) to suspend the implementation of the cybersecurity levy policy and ordered a review.

This directive is coming on the heels of the decision of the House of Representatives, last Thursday, which asked the CBN to withdraw its circular directing all banks to commence charging a 0.5 per cent cybersecurity levy on all electronic transactions in the country.

Gentechnews had earlier reported that 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 (Prohibition, Prevention, etc) (Amendment) Act 2024.

According to the Act, a levy amounting to 0.5 per cent of the value of all electronic transactions will be collected and remitted to the National Cybersecurity Fund, superintended by the Office of the National Security Adviser, (NSA).

All Financial institutions are required to apply the levy at the point of electronic transfer origination, while the deducted amount is to be explicitly noted in customer accounts under the descriptor “Cybersecurity Levy” and remitted by the financial institution. All financial institutions are required to start implementing the levy within two weeks from the issuance of the circular.

By the Apex Bank’s directive, the deduction of the levy by financial institutions should commence on May 20, 2024.

However, financial institutions are also to make their remittances in bulk to the NCF account domiciled at the CBN by the fifth business day of every subsequent month.

The circular also specifies 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.

“All other Financial Institutions (Microfinance Banks, Primary Mortgage Banks, Development Financial Institutions) – Within eight weeks of the issuance of the Circular,” the circular noted.

The CBN has highlighted strict adherence to this mandate with a warning that any financial institution that fails to comply with the provisions will face severe penalties. As outlined in the Act, non-compliant entities are subject to a minimum fine of two per cent of their annual turnover upon conviction.

However, the circular provides a list of transactions currently deemed eligible for exemption, to avoid multiple applications of the levy.

These include the loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and intra-bank transfers between customers of the same bank.

In the same vain, the exemptions include other financial institutions’ transfers to their correspondent banks, interbank placements, banks’ transfers to CBN and vice versa, inter-branch transfers within a bank, cheque clearing and settlements, letters of credit, and banks’ recapitalisation-related funding.

Others include the bulk funds movement from collection accounts, savings, and deposits including transactions involving long-term investments such as treasury bills, bonds, and commercial papers, and government social welfare programmes transactions.

These may include pension payments, non-profit and charitable transactions including donations to registered non-profit organisations or charities, educational institutions transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions, and transactions involving the bank’s internal accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.

The introduction of the new levy has created a lot of controversy among stakeholders, Nigeria Labour Congress (NLC) Civil Society Group who have threaten to protest or drag the Federal Government to court if government does not stop the cybersecurity levy policy.

Respite has come to Nigerians now as President Bola Tinubu has asked the Central Bank of Nigeria, (CBN) to suspend the implementation of the cybersecurity levy policy and ordered a review.