In a recent circular dated May 6, 2024, the Central Bank of Nigeria (CBN) introduced a new levy known as the “Cybersecurity Levy” on all electronic transactions conducted across banks, commercial institutions, and other financial entities. According to the circular, this levy is mandated under the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024, specifically Section 44 (2)(a), which stipulates a levy of 0.5% (0.005) of the value of all electronic transactions. The proceeds from this levy are to be remitted to the National Cybersecurity Fund (NCF) for administration by the Office of the National Security Adviser (ONSA).
The levy will be deducted at the source of the transaction, with implementation starting within two (2) weeks for commercial banks and within eight (8) weeks for other financial institutions. This levy adds to existing transaction charges such as stamp duty, electronic levy, and SMS charges.
How does this impact you? According to analysis by StatiSense, for every N1000 transaction, there will be a N5 fee, increasing to N50 for N10,000 transactions, and so forth. The levy is directly proportional to the value of transactions you conduct.
🇳🇬CYBERSECURITY LEVY
On eligible electronic transfers of…
₦1,000 — you pay ₦5
₦10,000 — you pay ₦50
₦100,000 — you pay ₦500
₦1,000,000 — you pay ₦5,000(*0.5% levy on eligible transactions)
*Exempted transactions: e.g. Loans, Salary, Intra-bank transfers, self…
— StatiSense (@StatiSense) May 7, 2024
With the implementation of the cashless policy, the CBN has rolled out various charges on withdrawals and deposits. The latest addition is the cybersecurity levy, which comes after banks reintroduced a 2% charge on deposits exceeding N500,000. According to the circular, failure to remit the levy results in fines amounting to not less than 2% of the defaulting business’s annual turnover, along with other penalties.
However, according to the circular, the following are exempted from the cybersecurity levy:
- 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.
- Other Financial Institutions (OFls) instructions to their correspondent banks.
- Interbank placements.
- Banks’ transfers to CBN and vice-versa.
- Inter-branch transfers within a bank.
- Cheques clearing and settlements.
- Letters of Credits (LCs).
- Banks recapitalization related funding – only bulk funds movement from collection accounts
- Savings and deposits including transactions involving long-term investments such as Treasury Bills, Bonds, and Commercial Papers.
- Government Social Welfare Programs transactions e.g. Pension payments.
- Non-profit and charitable transactions including donations to registered nonprofit organisations or charities.
- Educational Institutions transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions.
- Transactions involving bank’s internal accounts such as suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.
