The cybersecurity levy imposed by the Central Bank of Nigeria (CBN) has continued to spark debates about its impact on Nigerians.
Naijaonpoint reports that the apex bank announced in an official publication on Monday, May 6, that the newly introduced cybersecurity levy is in line with the provisions of the recently amended Cybercrime (Prohibition, Prevention, etc.) Act 2024.
The directive, detailed in a circular, instructs that the levy be applied at the point of electronic transfer origination, with the deducted amount to be reflected in the customer’s account as “Cybersecurity Levy.”
Financial institutions are hence required to start deductions within two weeks of the circular’s date and remit the accumulated levies monthly to the National Cybersecurity Fund (NCF), which is administered by the Office of the National Security Adviser (ONSA).
Increased Burden
Naijaonpoint reports that critics argue that the levy adds to the financial burden of Nigerians already facing economic hardship and high inflation. They point out it applies to business transactions, impacting their capital even before factoring in profits.
It is worth noting that the levy on bank transactions could discourage people from using banks, hindering the government’s push for financial inclusion. If people move towards informal transactions, this could also make it harder to control inflation.
However, some citizens are of the support that the cybersecurity levy has its benefits.
The supporters of the CBN initiative argue the levy creates a dedicated funding source for improving cybersecurity, potentially leading to better protection against cybercrime, which costs Nigeria millions annually.
Speculations are that the levy could also generate significant revenue for the government, potentially used for broader economic development (although critics argue this approach exploits a struggling economy).
Overall, the impact of the Cybersecurity Levy on Nigerians remains to be seen. Its effectiveness depends on how the collected funds are used and whether it discourages Nigerians from using the formal financial system.
Below is a breakdown of the 0.5% Cybersecurity Levy as applied to electronic transactions:
For instance, a ₦1,000 transfer will incur a ₦5 levy, while a ₦10,000 transfer will be charged ₦50.
It is worth noting that apart from the cybersecurity levy, there might be other charges depending on the transaction type and bank.
Naijaonpoint understands that banks may charge their own transfer fees depending on the amount being sent. These typically range from ₦10 to ₦50. This includes stamp duty—an additional ₦50 fee applies to electronic transfers of ₦10,000 and above. Some banks might also charge ₦4 for SMS notifications sent regarding the transaction.
Cost Of Electronic Transactions Upon Implementation of Cybersecurity Levy according to statisense:
Cybersecurity Levy: SENDERS now bear.
₦5 on ₦1,000
₦50 on ₦10,000
₦500 on ₦100,000
₦5,000 on ₦1,000,000
₦50,000 on ₦10,000,000
Stamp Duty: RECEIVERS bear:
₦50 on ₦10,000
₦50 on ₦100,000
₦50 on ₦1,000,000
₦50 on ₦10,000,000
Transfer Fees: SENDERS bear:
₦10 on ≤₦5,000
₦25 on ₦5,001 — ₦50,000
₦50 on >₦50,000
Value Added Tax: SENDERS bear:
₦0.75 on ₦10 Transfer fee
₦1.875 on ₦25 Transfer fee
₦3.75 on ₦50 Transfer fee
SMS Fee: SENDERS & RECEIVERS bear:
₦4 on each electronic transfer notification
All applicable on eligible electronic transactions.