The Central Bank of Nigeria (CBN) has retracted its directive for banks and payment service providers to collect and remit the proposed 0.5% cybersecurity levy outlined in the Cybercrime Prevention and Prohibition Amendment Act of 2024.
This decision was communicated through a revised circular dated May 17, which the CBN released on Monday, 20th May, 2024.
The circular, signed by Chibuzor Efobi, Director of Payment Systems Management, and Haruna Mustafa, Director of Financial Policy and Regulation, was addressed to commercial banks, payment service providers, non-interest banks, and other financial institutions.
The revised circular clearly stated that the previous directive regarding the cybersecurity levy had been withdrawn. This withdrawal follows the Federal Executive Council’s (FEC) decision at its most recent meeting to suspend the levy in response to significant public outcry.
The move to rescind the levy aims to address the concerns raised by stakeholders and the general public, highlighting the government’s responsiveness to public sentiment and the need for careful consideration in the implementation of such measures.
The Minister of Information and National Orientation, Mohammed Idris said:
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“The position of the government is that the policy has been suspended. It has been put on hold. That is the position of the government for now. It is undergoing some form of review. So, I can tell you that the cybersecurity levy has been put on hold. It is being reviewed by the government.”
Recall that the Central Bank of Nigeria (CBN) had earlier issued a circular to various financial institutions, including commercial banks, merchant banks, non-interest banks, and payment service providers, announcing the implementation of a 0.5% cybersecurity levy.
According to the circular, the levy was to be applied at the point of electronic transfer origination. Financial institutions were instructed to deduct the levy and remit it, with the deducted amount being clearly reflected in the customer’s account under the narration “Cybersecurity Levy.”
The circular detailed that these deductions were to begin two weeks from the circular’s date, with all financial institutions required to remit the collected levies in bulk to the NCF account domiciled at the CBN by the fifth business day of each subsequent month.
However, this directive quickly sparked widespread public outcry across Nigeria. Many Nigerians expressed their dissatisfaction, highlighting that banking transactions were becoming increasingly expensive due to numerous charges.
This backlash emphasized the growing concern among the public about the cost of banking services and the cumulative financial burden of additional levies and fees. In response to these concerns, and following a decision by the Federal Executive Council (FEC) at its latest meeting, the CBN issued a revised circular, announcing the suspension of the cybersecurity levy directive.
This move was aimed at addressing the public’s grievances and reassessing the implementation of such financial measures.