Everything You Need to Know About The CBN Cybersecurity Levy

1 week ago

In a new circular dated May 6, 2024, the Central Bank of Nigeria (CBN) enacted a new transaction levy tagged “Cybersecurity Levy” on all electronic transactions in all banks, commercial and other financial institutions. According to the circular, “Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and under the provision of Section 44 (2)(a) of the Act, “a levy of 0.5% (0.005) equivalent to a half percent of all electronic transactions value by the business specified in the second schedule of the Act, is to be remitted to the National Cybersecurity Fund (NCF), which shall be administered by the Office of the National Security Adviser (ONSA).”

The levy shall be deducted from the source of the transaction and immediately commence within two (2) weeks from the date the circular is released for commercial banks and within eight (8) weeks for other financial institutions. This is added to the already existing transaction charges such as stamp duty, electronic levy and SMS charge.

How does this affect you?

In an analysis made by StatiSense, every N1000 transaction incurs a N5 fee, N50 for N10,000 transactions, and so on. The levy is dependent on how much transactions you make.

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

Since the adoption of the cashless policy, the CBN has introduced multiple charges on withdrawals and deposits. The cybersecurity levy is the latest charge and it follows the reintroduction of a 2% charge on deposits above N500,000 by banks. In the circular, failure to remit the levy attracts a fine of not less than 2% of the annual turnover of the defaulting business, among 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.

How are Nigerians reacting to this?

Lemme break it down for a 10,000 transaction:

Stamp duty – Sender = N50
Stamp duty – Receiver = N50
Cybersecurity Levy = N50
NIP Charge = N25
NIP VAT = N1.875
SMS = N4

Total: N180.875 https://t.co/mo7QXWjWE5

— 𝐖𝐚𝐥𝐞 𝐀𝐣𝐢𝐛𝐨𝐲𝐞 (@AjiboyeWale) May 7, 2024

‘

To deposit N1m, you’d pay 20,000+ in charges. To transfer N1m, you’d pay N5,000. Issokay, carry on, Cardi. https://t.co/D6ZPxWESfa

— The Mayowa Tijani (@OluwamayowaTJ) May 7, 2024

Will the CBN or the banks take responsibility or refund money to an account holders if money is lost or their account wiped off through cyber attacks ? If not, they should not add any levy to our transactions because it won’t be of any benefit to us. If they charge, then, they… https://t.co/Td5hew00ga

— 𝗠𝗼𝗵𝗮 𝗦𝗵𝗲𝗶𝗸𝗵 (@MohaSheikh__) May 7, 2024

Why not put a cap to it, if we must tax? A threshold below which the levy doesn’t apply? Or let distinct rates apply for different transaction ranges. That way, the policy works for low-income earners. Don’t just bill a flat-out 0.5%, adding to the list of existing bank charges. https://t.co/57YvQMgyd9

— Stephen Kenechi (@Kayceewrights) May 7, 2024

When exactly are Nigerian citizens going to say enough is enough.

The FG is making life unbearable for its citizens. https://t.co/tV19tVLhjv

— OLUOMO OF DERBY (@Oluomoofderby) May 6, 2024