CBN officially withdraws cybersecurity levy

The Central Bank of Nigeria (CBN) has officially withdrawn the directive earlier given to banks to enact the process of deduction of cyber security levy to be administered by the office of the National Security Adviser (NSA).

This was disclosed in a circular to different categories of banks on Sunday evening, mobile money operators, payment service providers and others signed by the apex bank’s Director of payments system management, Chibuzor Efobi and Director of financial policy and regulation, Haruna .B. Mustafa.

According to the statement, “the circular on deduction and collection of the cyber security levy is hereby withdrawn.”

The apex bank had in line with  the enactment of the 2024 cyber crime (prohibition, prevention etc) amendment Act of 2024 which provides for a 0.5percent deduction of the value of all electronic transactions to the National Cyber Security Fund which would be administered by the office of the NSA.

The CBN on the 6th of May, 2024, issued a circular mandating all banks, mobile money operators, and payment service providers, to implement a new cybersecurity levy, following the provisions laid out in the Cybercrime (Prohibition, Prevention, etc.) Amendment Act 2024 (“the Act”).

cent of the value of all electronic transactions, will be collected and remitted to the National Cybersecurity Fund (NCF), overseen by the Office of the National Security Adviser.

Financial institutions were required to apply the levy at the point of electronic transfer origination. The deducted amount was to be explicitly noted in customer accounts under the descriptor “Cybersecurity Levy” and remitted by the financial institution.

According to Andersen Global, the introduction of the new levy has elicited mixed reactions from stakeholders as it will inevitably increase the cost of doing business in Nigeria and may impact the growth in adoption of digital transactions. While the government continues its drive to increase revenue, the introduction of this additional levy may appear ill-timed considering the current economic climate vis-a-vis the government’s commitment to the National Tax Policy of 2017 to reduce the number of taxes in Nigeria.