INTRODUCTION
The Central Bank of Nigeria (CBN) by a circular dated May 6, 2024 ordered all banks, financial institutions, and payments service providers to place a 0.5 percent levy on all electronic transactions. The levy (known as the “Cybersecurity levy”) which is further to Section 44(2)(a) of the Cybercrimes (Prohibition, Prevention, Etc) (Amendment) Act, 2024 (The Act), is imposed only on the initiator of the electronic transaction. It does not apply to the receiver.
PURPOSE OF LEVY
The Cybersecurity levy has received strong criticisms from many quarters of the country. However, the aim of the levy which is to check the surge of cybercrime in the financial sector will be achieved if the funds are diligently applied. However, it is not on all electronic transactions that the 0.5% levy will be deducted by the financial institutions.
In the Appendix annexed to the circular, the CBN listed some transactions which are not subject to the application of the levy.
THE EXEMPTED TRANSACTIONS ARE:
- Salary payments;
- Loan disbursements and repayments;
- Intra-account transfers within the same bank for the same customer;
- Inter-account transfers between different banks for the same customer;
- Intra-bank transfers between customers of the same banks;
- Cheque clearing and settlements;
- Pension payments;
- Letters of Credits (LCs);
- Transactions of Non-Governmental Organizations (NGO) including donations, tithes, and offerings paid via electronic channels;
- Educational institution transactions (tuition payment for schools, and other educational institutions);
- Savings and deposits (including long-term investments, treasury bills, bonds, and commercial papers);
- XII. Interbank placements;
- Banks transfer to CBN and vice-versa.
