Five Key Facts About Nigeria's New Cybersecurity Levy
On Monday, the Central Bank of Nigeria directed banks and other financial institutions to begin charging a cybersecurity levy on all electronic transactions.
According to a circular issued by the CBN, the levy implementation will start in two weeks.
The circular stated, “Following the enactment of the Cybercrime (Prohibition, Prevention, etc.) (Amendment) Act 2024, and pursuant to Section 44(2)(a) of the Act, ‘a levy of 0.5% (0.005) equivalent to half a percent of all electronic transaction values by businesses specified in the Second Schedule of the Act,’ is to be paid to the National Cybersecurity Fund, which will be managed by the Office of the National Security Adviser.”
Here are some key things to know about the new cybersecurity levy that Nigerians will be required to pay, according to the CBN circular:
1. A 0.5% levy, equivalent to half a percent, is applied to electronic transactions as required by the Cybercrime (Prohibition, Prevention, etc.) (Amendment) Act 2024.
2. The levy is paid by the initiator of the electronic transaction, with the amount deducted by the financial institution. The deduction will appear in the customer's account with the description: “Cybersecurity Levy.”
3. Financial institutions will withhold the levy and transfer it to the National Cybersecurity Fund, which is managed by the Office of the National Security Adviser.
4. Deductions are set to begin within two weeks from the circular's date, May 6, with financial institutions required to remit the collected levies in bulk to the National Cybersecurity Fund (NCF) account at the Central Bank of Nigeria (CBN) by the fifth business day of the following month.
5. Financial institutions must update their systems to manage levy deductions and remittances by the given deadlines. Failure to remit the levy can result in penalties, including a fine of up to 2% of a financial institution’s annual turnover.
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