Nigeria: CBN Exempts Several Transactions from Cybersecurity Levy, Including Salaries and Loans

The Central Bank of Nigeria (CBN) has announced exemptions for 16 transactions from the 0.5 percent cybersecurity levy on all electronic transactions, aimed at combating the rising threats of cybercrime in the financial system.

According to a circular released by the apex bank, commercial, merchant, non-interest, and payment service banks are directed to implement the levy, with funds to be remitted to the National Cybersecurity Fund (NCF), administered by the Office of the National Security Adviser (ONSA).

The circular, in compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015, follows the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024. Under Section 44 (2)(a) of the Act, a levy of 0.5 percent of all electronic transactions value is to be remitted to the NCF.

Exempted transactions include loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and intra-bank transfers between customers of the same bank and Other Financial Institutions (OFIs).

Interbank placements, transfers to and from the Central Bank of Nigeria (CBN), inter-branch transfers within a bank, and transactions involving bank’s internal accounts such as suspense accounts, clearing accounts, and profit and loss accounts are also exempted.

Other exemptions encompass transactions involving long-term investments such as treasury bills and bonds, government social welfare programs, non-profit and charitable transactions, and educational institution transactions.

Failure to remit the levy constitutes an offence liable to a fine of not less than two percent of the annual turnover of the defaulting business, among other penalties.

The new levy is a statutory requirement in the amendment to the Cybercrime Act signed into law by President Bola Tinubu in February 2024. Senator Shehu Umar Buba, Chairman of the Senate Committee on National Intelligence and Security, sponsored the amendments, aiming to address gaps and realign with changing cybersecurity realities.