Reps Slam Brakes on Cybersecurity Levy: CBN Ordered to Hit Pause

Lawmakers Direct CBN To Stop The Cybersecurity Levy

The Central Bank of Nigeria (CBN) has been instructed by the House of Representatives to stop implementing the 0.5% cybercrimes fee that would have been applied to bank customers' electronic transactions.

As a result, the House instructed the CBN to revoke the misleading circular that was previously in effect and release a clear circular that adheres to the language and spirit of the Cybercrimes (Amendment) Act, 2024.

The Green Chamber also required the appropriate direction of the CBN to be provided by its Committees on Banking Regulations, Banking, and Other Ancillary Institutions.

This came after a resolution of pressing public concern, sponsored by 359 other members of the House Minority Leader, Hon. Kingsley Chinda (PDP Rivers), was adopted.

Moving the motion, Chinda stated that on May 6, 2024, CBN sent out a circular to all commercial, merchant, non-interest, and payment service banks as well as other financial institutions, mobile money operators, and payment service providers (“CBN Circular”). In this circular, Nigerians were informed of a proposed 0.5% levy on electronic transactions in accordance with Section 44(2)(a) of the Cybercrimes (Amendment) Act, 2024.

“Further notes that businesses which the said Section 44(2)(a) refers to are listed in the Second Schedule to the Cybercrimes Act to be: a) GSM Service Providers and all telecommunication companies; b) Internet Service Providers; c) Banks and Other Financial Institutions; d) Insurance Companies and e) Nigerian Stock Exchange.

“Concerned that the CBN circular mandates all Banks, Other Financial Institutions and Payments Service Providers to implement the Cybercrimes Act by applying the levy at the point of electronic transfer origination as "Cybersecurity Levy" and remitting same.

“Further concerned that the wordings of the CBN Circular leaves the CBN directive to multiple interpretations including that the levy be paid by Bank customers, that is, Nigerians against the letters and spirit of Section 44(2)(a) and the Second Schedule to the Cybercrimes Act, which specifies the businesses that should be levied accordingly,” Chinda said.

He pointed out that “a levy of 0.5% (0.005) equivalent to half percent of all electronic transactions value by business specified in the Second Schedule to the Act” must be paid into the Cybersecurity Fund, according to Section 44(2)(a) of the Cybercrimes (Prohibition, Prevention, etc.) (Amendment) Act, 2024.

The senator expressed concern that this legislation has caused anxiety since individuals and civil society organizations have been criticizing the Federal Government on traditional and social media, demanding, among other things, that the “imposed levy on Nigerians" be reversed.

He contended that in the face of increasing inflation and the removal of multiple subsidies from electricity, petroleum, and other industries, Nigerians would suffer from the implementation of the Cybercrime Act in error unless prompt and practical steps are taken to stop the CBN's proposed action.