THE Central Bank of Nigeria (CBN) said it would continue to enforce a 0.005 cybercrime levy on all electronic transactions carried out by the financial institutions in the country, despite an early official suspension of the levy.
The CBN stated in a new guidelines, ‘Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for Fiscal Years 2024-2025 document,’ released on Tuesday, September 17.
It said, “The CBN shall continue to enforce the payment of the mandatory levy of 0.005 per cent on all electronic transactions by banks and other financial institutions, in accordance with the Cybercrime (Prohibition, Prevention, etc.) Act, 2015.”
It backed its decision with a circular, ‘Issuance of Risk-based Cybersecurity Framework and Guidelines for Deposit Money Banks and Payment Service Providers’ referenced BSD/DIR/GEN/LAB/11/25,’ issued on October 10, 2018.
It said to combat the increasing cyber security threat in the banking industry, banks and Payment Service Providers (PSPs) are mandated to adhere to the guidelines on the risk-based cyber security framework.
The apex bank also cited another circular, ‘Issuance of Risk-based Cybersecurity Framework and Guidelines for Other Financial Institutions (OFIs)’, referenced OFI/DOA/CON/ACT/004/155, it issued on June 29, 2022, as supporting its stand.
It said, “The guidelines specified the minimum cyber security baseline to be implemented by banks, OFIs and PSPs, and mandated the appointment of a Chief Information Security Officer (CISO) to oversee cyber security issues.”
The cybersecurity levy is part of the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024, which approved that a levy amounting to 0.005 per cent of the value of all electronic transactions will be collected and remitted to the National Cybersecurity Fund, overseen by the Office of the National Security Adviser.
In May this year, the apex bank directed financial institutions to collect a 0.005 per cent cybercrime levy on all transactions but it was greeted with a lot of criticism among Nigerians.
Others had argued that enforcing it would worsen the hardships on Nigerians who were already overburdened by various taxes.
At its plenary session on Thursday, May 9, the House of Representatives disagreed with CBN on the levy and asked it to withdraw its order.
A global tax and advisory firm, KPMG criticised the Nigerian government on its move to implement the 0.5 per cent cybercrime levy, arguing that no country could tax its way into prosperity.
Other concerned Nigerians, including BudgIT and the Socio-Economic Rights and Accountability Project (SERAP), took to court to challenge the apex bank over the planned implementation of the levy.
However, on May 14, President Bola Tinubu, after the Federal Executive Council (FEC) meeting that lasted for two days, officially suspended the 0.5 per cent cybersecurity levy on electronic banking transactions.
The recent disclosure by the CBN throws up a lot of questions, like when the suspension was lifted, when 0.005 per cent was instituted and whether any official announcement was issued in that regard.
The ICIR reported that despite public outcry over the introduction of the 0.005 per cent cyber security levy, the Senate Committee on National Security and Intelligence has given its nod to the implementation of the directive by the Central Bank of Nigeria (CBN).
Most citizens and pressure groups like the Nigeria Labour Congress (NLC) the Northern Elders Forum and the presidential candidate of the Labour Party in the 2023 General elections Peter Obi have all kicked against the levy while berating the government’s ‘insensitivity’ to the current economic plight of Nigerians.
But the Senate Committee on National Security and Intelligence said that the 0.5 per cent cybercrime levy provided for in the Cybercrimes (Prohibition, Prevention, etc) (Amendment) Act, 2024 was not punitive, arguing that it had numerous exemptions to protect and relieve ordinary citizens, particularly the poor.