Central bank directs Banks and OFIs to charge 0.5% cybersecurity levy on transactions
The Central Bank of Nigeria has directed all banks in the country to begin charging 0.5% cybersecurity levy on transactions (i.e. 0.005). In a circular released on Monday the CBN said the implementation of the levy would commence two weeks from the day of the announcement, that is, from Monday April 20, 2024.
What this means is additoinal cost of transactions for individuals and for businesses. For instance, an individual doing a total of N100,000 transfers in the month will incur an additional cost of N500 while a business doing an average transfer of N100,000,000 in the month will incur N500,000 additional cost.
Accordingly, all Banks, Other Financial Institutions and Payments Service Providers are hereby required to implement the above provision of the Act as follows:
The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution.
The deducted amount shall be reflected in the customer’s account with the narration: “Cybersecurity Levy”·@
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.
System reconfigurations towards ensuring complete and timely submission of remittance files to the Nigeria Interbank Settlement System (NIBSS) Pie shall be completed as follows:
Within four (4) weeks of this circular – Commercial, Merchant, Non Interest and Payment Service Banks; and Mobile Money Operators.Within eight (8) weeks of this circular – all Other Financial Institutions (Microfinance banks, Primary Mortgage banks, Development Finance Institutions).
Penalties for Non-complianceSection 44 (8) of the Act prescribes that failure to remit the levy is an offence and is liable on conviction to a fine of not less than 2% of the annual turnover of the defaulting business, amongst others.
In giving the directives and to avoid multiple application of the levy on the same transaction/transfer, the CBN captures transactions currently deemed eligible and are exempted from the application of the cybersecurity levy. There is a total of 16 of such exempted transactions. SEE THE LIST OF EXEMPTED TRANSACTIONS HERE
