CBN Withdraws Circular On Controversial 0.5% Cybersecurity Levy

Confidence UbaniMay 20, 20241 Mins read127

CBN

The Central Bank of Nigeria (CBN) has withdrawn its circular mandating banks and payment service providers to collect and remit a 0.5% cybersecurity levy as proposed in the Cybercrime Prevention and Prohibition Amendment Act of 2024.

The decision followed widespread public backlash and a directive from the Federal Executive Council (FEC) to suspend the levy.

In a revised circular dated May 17 and released on Monday, CBN officials Chibuzor Efobi, Director of Payment Systems Management, and Haruna Mustafa, Director of Financial Policy and Regulation, announced the withdrawal of the previous directive.

The circular, addressed to commercial banks, payment service providers, non-interest banks, and others, stated:

“The Central Bank of Nigeria circular dated May 6, 2024 (Ref. PSMD/DIR/PUB/LAB/017/004) on the above subject. Further to this, please be advised that the above referenced circular is hereby withdrawn.”

Following the FEC’s decision, Minister of Information and National Orientation Mohammed Idris confirmed the suspension, stating, “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.”

The CBN had initially issued the circular to financial institutions on May 6, specifying that the levy would be applied at the point of electronic transfer origination, deducted by financial institutions, and remitted monthly to the National Cybersecurity Fund account at the CBN. The directive sparked a nationwide outcry, with Nigerians expressing dissatisfaction over increasing banking transaction costs due to numerous charges.

Prominent organisations such as the Socio-Economic Rights and Accountability Project (SERAP), the Nigeria Labour Congress, and the Nigerian Economic Summit Group urged the government to reconsider the levy, citing concerns over multiple taxation and inflationary pressures on Nigerians.

The Federal Executive Council’s decision to suspend the levy was made in response to these concerns. Minister Mohammed Idris emphasised that the matter would be reviewed in future FEC meetings.

“The decision to suspend the cybersecurity levy came in response to concerns raised by various stakeholders regarding its timing and potential impact on Nigerians,” he noted.

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