Since the Central Bank of Nigeria announced the cybersecurity levy it says would come into effect in two weeks, the reactions from bank customers have been largely negative because they fear the invention of new taxes that will overburden them.

In the cybersecurity levy that was communicated via a Monday 6 May circular issued by the banking regulator, customers see a new billing system that was designed to drain what limited resources they have left.

The CBN in the recent memo had instructed commercial, merchant, non-interest, payment service banks and similar formations in finance to implement 0.5 per cent deduction in respect to electronic transactions.

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Doing this is keeping with the Cybercrime Act 2024. Section 44 of the act according to the circular imposed a levy of 0.5% (0.005) equivalent to half a percent of all electronic transactions value by the business specified in the second schedule of the Act.

Banking institutions and not their customers directly have the burden of the collection and subsequent remittance to the National Cybersecurity Fund (NCF) account domiciled with the central bank within the first five working days of a new month, while the Office of the National Security Adviser will oversee the control of the collections gathered.

Re: Cybercrimes (Prohibition, Prevention, etc.)(Amendment) Act 2024 – Implementation Guidance on the Collection and Remittance of the National Cybersecurity Levy…https://t.co/ch7YmiikcK pic.twitter.com/Od7r4cr06u

— Central Bank of Nigeria (@cenbank) May 6, 2024

But not every electronic transaction will be thrown into the NCF blanket due to the exemptions laid out. An exclusive list of 16 payment categories will not be touched by the Cybersecurity Act, 2024, and that covers the most basic of deals captured after this line.

1. Loan disbursements and repayments.
2. Salary payments.
3. Intra-account transfers within the same bank or between different banks for the same customer.
4. Intra-bank transfers between customers of the same bank.
5. Other Financial Institutions instructions to their correspondent banks.
6. Interbank placements.
7. Banks’ transfers to CBN and vice-versa.
8. Inter-branch transfers within a bank.
9. Cheque clearing and settlements.
10. Letters of Credits.
11. Banks’ recapitalisation-related funding – only bulk funds movement from collection accounts.
12. Savings and deposits, including transactions involving long-term investments such as Treasury Bills, Bonds, and Commercial Papers.
13. Government Social Welfare Programmes transactions e.g. Pension payments.
14. Non-profit and charitable transactions, including donations to registered non-profit organisations or charities.
15. Educational institutions’ transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions.
16. Transactions involving bank’s internal accounts such as suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.

Ayodele Johnson

Ayodelé is a Lagos-based journalist and the Content and Editorial Coordinator at Meiza. All around the megacity, I am steering diverse lifestyle magazine audiences with ingenious hacks and insights that spur fast, informed decisions in their busy lives.