CBN Imposes 0.5% Per Transaction for National Cybersecurity Development.

by Editor

May 7, 2024

in Economy, News, Nigeria

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Pension payment among other levies exempted as CBN imposes 0.5% per transaction for National Cybersecurity development.
BY MICHAEL AKPAN
Editor

The Central Bank of Nigeria (CBN) has placed exceptionality on salary payments, cheque clearance, and pensions among other E-Transaction from the cybersecurity levies. This is contained in a circular signed by the director of payments system management and director of financial policy and regulation of the Apex Bank, Chibuzor Efobi and Haruna Mustafa respectively in the early hours of Monday, May 6, 2024.

The circular which stated that all bank customers of several financial institutions including digital customers will be charged 0.05% on every transaction to contribute to the funding of cybersecurity to curb cybercrime in the country has exempted payments made to the institutions listed below.

IMPLEMENTATION OF THE CYBERCRIMES (PROHIBITION, PREVENTION, ETC) (AMENDMENT) ACT 2024. SCHEDULE OF EXEMPTIONS FROM CYBERSECURITY LEVY are as follows:

1. Loan disbursements and repayments
2. Salary payments
3. Intra-account transfers within the same bank or between different banks for the same customer
4. Intra-bank transfers between customers of the same bank
5. Other Financial Institutions (OFIs) instructions to their correspondent banks
6. Interbank placements
7. Banks’ transfers to CBN and vice-versa
8. Inter-branch transfers within a bank
9. Cheques clearing and settlements
10. Letters of Credits (LCs)
11. Banks’ recapitalization-related funding – only bulk funds movement from
collection accounts
12. Savings and deposits including transactions involving long-term investments such as Treasury Bills, Bonds, and Commercial Papers.
13. Government Social Welfare Programs transactions e.g. Pension payments
14. Non-profit and charitable transactions including donations to registered non-government organisations or charities
15. Educational Institutions transactions, including tuition payments and Other Transactions involving schools, Universities, or other educational institutions.
16. Transactions involving the 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.

The other part of the circular made reference to the June 25, 2018 circulation with (Ref: BPS/DIR/GEN/CIR/05/008) and October 5, 2018, respectively which was previously released reads,
On compliance with the Cybercrimes(Prohibition, Prevention, Etc.)Act 2015 refer. The recent public engagements by the Office of the National Security Adviser (ONSA) on the above subject, also refer to the following enactment of the Cybercrime (Prohibition, Prevention, etc) (Amendment)Act 2024 and according 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 (NCF), which shall be administered by the Office of the National Security Adviser (ONSA)”, CBN said.

It further reads, “Accordingly, all Banks, Other Financial Institutions and Payments Service Providers are hereby required to implement the above provision of the Act as follows”:

1. The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution.

2. The deducted amount shall be reflected in the customer’s account with the narration: “Cybersecurity Levy.

3. Deductions shall commence within two (2) weeks from the date of this circular for all financial institutions and the monthly remittance of the levies collected in bulk to the NCF account domiciled at the CBN by the 5th business day of every subsequent month.

4. System reconfigurations towards ensuring complete and timely submission of remittance files to the Nigeria Interbank Settlement System (NIBSS) Plc shall be completed as follows:
a. Within four (4) weeks of this circular – Commercial, Merchant, Non-
Interest and Payment Service Banks; and Mobile Money Operators.
b. Within eight (8) weeks of this circular – all Other Financial Institutions
(Microfinance banks, Primary Mortgage banks, Development Finance
Institutions).

5. Exemptions – To avoid multiple applications of the levy on the same
transaction/transfer, Appendix 1 (attached) captures transactions currently
deemed eligible and are exempted from the application of the levy.

Penalties for Non-compliance Section 44 (8) of the Act prescribes that failure to remit the levy is an offense and is liable on conviction to a fine of not less than 2% of the annual turnover of the defaulting business, amongst others.

Finally, all institutions under the regulatory purview of the CBN are hereby directed to
note and comply with the provisions of the Act and this circular.

A comprehensive and analytic breakdown of the Cybersecurity levy is analyzed below:
₦5 on ₦1,000
₦50 on ₦10,000
₦500 on ₦100,000
₦5,000 on ₦1,000,000
₦50,000 on ₦10,000,000.