Banks and other financial institutions have been instructed by the Central Bank of Nigeria (CBN) to cease imposing a 0.5 percent cybersecurity fee on electronic transactions.
All commercial, merchant, non-interest, payment service banks, other financial institutions, mobile money operators, and payment service providers received a circular disclosing this information.
Director of Payments System Management Chibuzor Efobi and Director of Financial Policy and Regulation Department Haruna Mustafa of the CBN jointly signed the circular.
The federal government and the House of Representatives ordered the CBN to halt the implementation of the 0.5 percent cybersecurity fee on transactions, and the apex bank complied.
According to the CBN’s previous circular, “a levy of 0.5 percent (0.005) equivalent to a half percent of all electronic transactions value by the business specified in the second schedule of the Act, is to be remitted to the National Cybersecurity Fund (NCF), which shall be administered by the Office of the National Security Adviser (ONSA)” per Section 44 (2)(a) of the Cybercrime (Prohibition, Prevention, etc.) (Amendment) Act 2024.
The National Cybersecurity Fund, sometimes known as “The Fund,” is established by the Act. The Fund, owned by the Central Bank of Nigeria, receives contributions from a variety of sources under the Act’s stipulations.
These consist of a tax levied on particular companies that conduct electronic transactions, donations and grants from organizations and individuals, appropriations made by the National Assembly, and other assets that accumulate.
To encourage donations from stakeholders, the Act also makes sure that any monies directed into the National Cybersecurity Fund are free from income tax. Participation is further encouraged by the fact that contributions to the Fund are tax deductible.
Companies that are designated under the Act have 30 days to pay the tax, which is 0.005 percent of electronic transactions, straight into the Fund. The direct contribution approach seeks to guarantee timely resource distribution and expedite the funding process.
In addition, the Act states that up to 40% of the Fund may be used for initiatives that tackle the urgent problem of combating violent extremism (CVE).
Cybersecurity is the process of defending computer networks, systems, applications, and data from online threats, illegal access, loss, or theft. It includes a range of tools, procedures, and methods intended to protect data and guarantee its availability, confidentiality, and integrity.
