President Bola Tinubu has directed the Central Bank of Nigeria to suspend the implementation of the contentious cyber security levy policy and ordered a review.
Recall that the CBN had on May 6, 2024, issued a circular mandating all banks, mobile money operators, and payment service providers to implement a new cyber security levy, following the provisions laid out in the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024.
The Act stipulates that a levy amounting to 0.5 per cent of the value of all electronic transactions will be collected and remitted to the National Cyber security Fund, overseen by the Office of the National Security Adviser.
Financial institutions are required to apply the levy at the point of electronic transfer origination.
The circular provides a list of transactions currently deemed eligible for exemption, to avoid multiple applications of the levy.
These are loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, and intra-bank transfers between customers of the same bank.
Exemptions include other financial institutions’ transfers to their correspondent banks, interbank placements, banks’ transfers to CBN and vice versa, inter-branch transfers within a bank, cheque clearing and settlements, letters of credit, and banks’ recapitalisation-related funding.
Others are bulk funds movement from collection accounts, savings, and deposits including transactions involving long-term investments such as treasury bills, bonds, and commercial papers, and government social welfare programmes transactions.
These may include pension payments, non-profit and charitable transactions including donations to registered non-profit organisations or charities, educational institutions transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions, and transactions involving the bank’s internal accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.
“All other financial institutions (microfinance banks, primary mortgage banks, development financial institutions) – Within eight weeks of the issuance of the Circular,” the circular noted.
The deducted amount is to be explicitly noted in customer accounts under the descriptor “Cyber security Levy” and remitted by the financial institution. All financial institutions are required to start implementing the levy within two weeks from the issuance of the circular.
The deduction was to commence on May 20.
Last Thursday, the house of representatives described the cyber security as “ambiguous” and called on the CBN to halt it implementation.
However, there is a presidential directive to the CBN to put on hold forthwith the implementation of the cyber security fee.
According to Punch, senior presidency official who craved anonymity disclosed that President Bola Tinubu was aware of the economic burden on Nigerians since his hard line economic reforms began last May, adding that he did not want to risk adding to the burden with more levies.
“The President is sensitive to what Nigerians feel. And he will not want to proceed with implementing a policy that adds to the burden of the people.
“So, he has asked the CBN to hold off on that policy and ordered a review. I would have said he ordered the CBN, but that is not appropriate because the CBN is autonomous. But he has asked the CBN to hold off on it and review things again,” the source stated.
Another presidency official also told the paper that the discrepancies in the implementation prompted the president to order a review.
“If you look at it, the law predates the Tinubu administration. It was enacted in 2015 and signed by Goodluck Jonathan. It is only being implemented now.
“You know he (Tinubu) was not around when that directive was being circulated. And he does not want to present his government as being insensitive. As it is now, the CBN has held off the instruction to banks to start charging people. So, the President is sensitive. His goal is not to just tax Nigerians like that. That is not his intention. So, he has ordered a review of that law,” he said.
