The Central Bank of Nigeria (CBN) has withdrawn its circular mandating banks and payment service providers to collect and remit the cybersecurity levy as proposed in the Cybercrime Prevention and Prohibition Amendment Act of 2024.
The apex bank announced this in a revised circular dated May 17, 2024, signed by its Director of Payment Systems Management, Chibuzor Efobi, and Director of Financial Policy and Regulation Department, Haruna Mustafa, and addressed to commercial banks, PSPs, non-interest banks, among others.
According to the circular, the bank’s previous comment on the matter has been removed.
It stated: “Circular to all commercial, merchant, non-interest, and payment service banks; other financial institutions, mobile money operators, and payment service providers.”
Re: Cybercrimes (Prohibition, Prevention, Etc.) (Amendment) Act 2024 – Implementation Guidance on the Collection and Remittance of the National Cybersecurity Levy
“The Central Bank of Nigeria circular dated May 6, 2024 (Ref: PSMD/DIR/PUB/LAB/017/004) on the above subject refers.”
“Further to this, please be advised that the above-referenced circular is hereby withdrawn.”
The withdrawal follows the decision of the Federal Executive Council to suspend the implementation of the provisions of the law citing the need to conduct further reviews.
Recall, on May 6, 2024, the CBN through a circular ordered commercial banks, Payment Service Providers and others to begin collection and remittance of 0.5% of the transaction cost of electronic transactions as cyber security levy in line with the provisions of the amended 2024 cybercrimes prohibition and prevention act.
Additionally, the apex bank warned that the penalty for non-compliance is as specified in the amended Cyber Crimes Prohibition and Prevention Act. This penalty includes a fine amounting to no less than 2% of the turnover of the defaulting business, among other sanctions.
The introduction of the levy drew the ire of Nigerians who complained that the timing is wrong and adds additional cost to businesses operating in the country. The Centre for the Promotion of Public Enterprise, (CPPE) noted that the new levy will add to inflation pressure and stifle business growth across the country.
The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has further urged the Federal Government and the Central Bank of Nigeria (CBN) to set a maximum limit of N500 for the newly introduced cybersecurity levy, in order to alleviate the financial burden on the private sector.
In response to the criticisms and complaints of Nigerians, the federal government through the Minister of Information announced the suspension of the levy pending some form of review in the future. The federal House of Representatives also called for the suspension of the levy even though they passed the amendment act that introduced it.