CBN Reintroduces Cybercrime Levy On Electronic Transactions, Reduces Rate To 0.005%
The Central Bank of Nigeria (CBN) has reintroduced a controversial levy on all electronic transactions, reducing the rate to 0.005%, down from the previously proposed 0.5%. The levy, aimed at addressing cybersecurity concerns, was announced nearly four months after facing public backlash.
According to the CBN’s Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for the Fiscal Years 2024-2025, the levy is in line with the Cybercrime (Prohibition, Prevention, etc.) Act of 2015. It applies to banks and financial institutions, requiring them to implement risk-based cybersecurity measures.
The guidelines mandate banks, Payment Service Providers (PSPs), and Other Financial Institutions (OFIs) to appoint a Chief Information Security Officer (CISO) to oversee cybersecurity issues. The funds deducted from electronic transactions will be remitted to the National Cybersecurity Fund (NCF), managed by the Office of the National Security Adviser (ONSA).
The levy will be deducted at the point of electronic transfer and will appear in customer accounts as “Cybersecurity Levy.” However, certain transactions, such as loan disbursements, salary payments, and intra-account transfers, are exempt from the levy.
This move follows the CBN’s initial attempt to introduce a 0.5% levy in May 2024, which sparked widespread criticism from the Organised Private Sector (OPS) and the general public. In response, the CBN withdrew the circular but has now reintroduced the levy at a significantly reduced rate.
The CBN warned that failure to remit the levy could result in penalties, including fines of up to 2% of the annual turnover of defaulting institutions. All financial institutions under the CBN’s regulatory purview are expected to comply with the updated provisions.
The central bank’s move is seen as part of broader efforts to strengthen cybersecurity in Nigeria’s financial system, as cybercrime continues to pose a significant threat.
