CBN directs banks to cease imposing 0.5% cybersecurity charges on electronic transactions, reshaping Nigeria's digital banking landscape. Explore the legislative framework, implications for financial institutions, and impact on customers.
The Central Bank of Nigeria (CBN) has issued a directive instructing banks and financial institutions to halt the imposition of 0.5 percent cybersecurity charges on electronic transactions. This decision, communicated through a circular to commercial, merchant, non-interest, and payment service banks, as well as other financial entities, follows calls from the House of Representatives and the federal government to suspend the levy's implementation.
Jointly signed by Chibuzor Efobi and Haruna Mustafa, directors of payments system management and financial policy and regulation departments respectively, the circular cited legislative developments as the basis for the CBN's action. It referenced the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024, which mandates a levy of 0.5 percent on electronic transaction values for businesses listed in the Act's second schedule. Funds from this levy were designated for the National Cybersecurity Fund (NCF), managed by the Office of the National Security Adviser (ONSA).
Under the Act, the NCF receives contributions from multiple sources, including levies on specified electronic transactions, grants, individual and organizational contributions, appropriations, and other assets. Contributions to the Fund are exempt from income tax, with tax-deductible incentives provided to encourage stakeholder participation. Businesses identified in the Act are required to remit the levy directly to the Fund within 30 days of the transaction.
Additionally, the Act allocates a portion of the Fund, up to 40 percent, towards countering violent extremism (CVE) programs. Cybersecurity, as defined by the Act, encompasses measures to protect computer systems, networks, and data from digital threats, ensuring information integrity, confidentiality, and availability.
The CBN's directive to cease 0.5 percent cybersecurity charges marks a pivotal development in Nigeria's regulatory landscape, signaling a shift in financial policy priorities towards fostering electronic transaction security and compliance.
