Cybersecurity levy: All you need to know about CBN’s new directive

The Central Bank of Nigeria (CBN), on Monday, directed banks and other financial institutions to start charging a cybersecurity levy on all banking transactions.

This was contained in a circular sighted by our reporter on Monday.

According to the circular, ”the implementation of the levy would start in two weeks”.

In this article, TRIBUNE ONLINE highlights the basic tenets of the new CBN directive.

What it entails

The circular read in part, “Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and pursuant to 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, which shall be administered by the Office of the National Security Adviser.”

The levy

The levy is 0.5% (half percent) of the electronic transaction value. It applies to transactions specified in the Second Schedule of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024.

How it works

The levy is paid by the originator of the electronic transaction and deducted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration: “Cybersecurity Levy”.

Remittance

Financial institutions will remit the collected levies to the National Cybersecurity Fund, administered by the Office of the National Security Adviser.

Commencement date

Deductions will commence within two weeks from May 6, and financial institutions must remit collected levies by the fifth business day of the following month.

Deadline

Financial institutions have deadlines to update their systems to handle levy deductions and remittances. Failure to remit the levy can result in penalties, including a fine of up to 2% of a financial institution’s annual turnover.