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The Central Bank of Nigeria (CBN) has instructed all banks and other financial institutions to stop imposing a 0.5% cybersecurity fee on electronic transactions.
This has been disclosed in a circular to all commercial banks, commercial banks, interest-free payment service banks, other financial institutions, mobile operators and payment service providers.
This circular was jointly signed by Chibuzor Efobi, Director, Payment Systems Management, and Haruna Mustafa, Director, Monetary Policy and Regulation Department, CBN.
The apex bank's decision follows the direction of the House of Representatives and the Federal Government that the CBN should suspend the imposition of a 0.5 percent cybersecurity tax on transactions.
An earlier circular of the CBN stated: After the enactment of the Cyber Crimes (Prohibition, Prevention etc.) (Amendment) Act, 2024, Section 44(2)(a) of the Act. Pursuant to the provisions, ``Taxation of 0.5%'' ``Percentage (0.005)'' is equivalent to 0.5% of the gross electronic transactions of entities specified in the Second Schedule of the Act, and is based on the The funds will be transferred to the National Security Fund (NCF). (ONSA )..”
This Act establishes a fund to be known as the National Cybersecurity Fund, referred to as the “Fund.” In accordance with the provisions of the law, various sources contribute to the fund held at the Central Bank of Nigeria.
These include levies levied on certain companies conducting electronic transactions, grants from donor organisations, donations from individuals and organisations, National Assembly funds and other applicable assets.
The Act also ensures that all funds flowing into the National Cybersecurity Fund are exempt from income tax, encouraging contributions from stakeholders. Moreover, donations to the Fund are tax deductible, providing a further incentive to participate.
Companies identified under the Act must remit the levy, set at 0.005% of electronic transactions, directly to the Fund within a specified period of 30 days. This direct contribution mechanism is intended to streamline the fundraising process and ensure timely resource allocation.
Additionally, the law provides that not more than 40 percent of the funds may be allocated to programs that address the urgent problem of countering violent extremism (CVE).
Cybersecurity is the practice of protecting computer systems, networks, programs, and data from digital attack, unauthorized access, damage, and theft.
This includes a variety of technologies, processes, and practices designed to protect information and ensure data confidentiality, integrity, and availability
