Tag: cybersecurity levy

The Trade Union Congress (TUC) has rejected plans by the federal government to impose a 0.5 percent cybersecurity levy on electronic transactions by commercial banks.

The Central Bank of Nigeria (CBN) had directed banks to implement the 0.5 percent cyber security levy on electronic transactions.

The policy will start on May 20.

In a statement by the president of TUC, Comrade Festus Osifo on Wednesday, the TUC urged the federal government to give a “marching order to the CBN to immediately withdraw the circular and cancel the planned levy forthwith.”

The TUC threatened to mobilise its members, stakeholders, and the masses to embark on the immediate protest that would culminate into a total shutdown of the Nigerian economy as this was one exploitation too many.

The TUC said it was quite disturbed that since the inception of President Bola Tinubu’s administration, “its policies have brought pain, anguish and sorrow on Nigerians.”

The statement reads: “The Trade Union Congress of Nigeria (TUC) has received with a rude shock the recent directive by the Central Bank of Nigeria (CBN) in a circular to banks imposing a 0.5 percent cybersecurity levy on almost all electronic transactions. It is indeed illogical that this is coming at a time when Nigerians are grappling with the high cost of living that is imposed by the devaluation of Naira, hyper hike in the cost of Petrol, supersonic increment in the cost of electricity tariff, etc. 

“We are quite disturbed that since the inception of this administration, its policies have brought pain, anguish, and sorrow to Nigerians. Whereas a bank account holder in Nigeria today is currently charged stamp duty, transfer fee, VAT on transfer fee, and all forms of account maintenance levies by both government and the banks; this burden seems not to be enough as the government is poised to inflict further pain on the already battered Nigerians. So many policies of this government are not only imposing hardship on the downtrodden Nigerians but also on businesses, as some of them are shutting down because of the unfriendly business environment.

“The National Assembly that ought to be the bastion of democracy and the protector of the citizens oftentimes engages in collusion with elements within the executive to exploit the people. How can such an obnoxious law see the light of day in a truly people-oriented legislative house? This is indeed a conspiracy of the oppressors against the masses and citizens of this country and it must be resisted by all well-meaning Nigerians.

“Financial analysts have done a preliminary estimate using the 2023 online transfer volume in Nigeria that fell within these categories and put the value at over N2 trillion; what kind of cybercrime are we fighting with this humongous amount of money? This ugly development will further encourage people to hoard cash at home, reduce financial inclusion, increase poverty, and exacerbate the misery index.

“The cost of living is at an all-time high, food inflation is biting, all contributing to the miserability of Nigerians. This act is viewed as a deliberate plot to continue to drain Nigerians of their hard-earned money and we kick against this vehemently.

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“All Nigerians are interested in right now is the urgent conclusion of discussions around the minimum wage and not a vexatious policy that is further reducing the already depleted disposable income of the masses and indirectly ridiculing the gain which the minimum wage would have brought to the people when concluded.

“We call on the federal government to give a marching order to the Central Bank of Nigeria to immediately withdraw the circular and cancel the planned levy forthwith; failure of which we will be left with no option than to mobilize all our members, stakeholders and indeed the entire masses to embark on the immediate protest that would culminate into the total shutdown of the Nigerian economy as this is one exploitation too many. Enough is enough; Nigerians must breathe! This extortion must stop.”

All commercial, merchant, non-interest, payment service banks and other financial institutions, among others got a directive from the Central Bank of Nigeria (CBN) to activate the payment of 0.5 per cent on some electronic transactions.

Others who got the CBN circular yesterday, are mobile money operators and payment service providers.

The circular outlines the implementation guidance on the collection and remittance of the National Cyber-security Levy, following the enactment of the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024.

Referring to previous directives and public engagements by the Office of the National Security Adviser (ONSA), the circular stressed the necessity of compliance with the amended Cybercrimes Act.

Pursuant to Section 44 (2)(a) of the Act, a levy of 0.5% (0.005) equivalent to a half percent of all electronic transactions value by specified businesses is mandatory. This levy is to be remitted to the National Cyber-security Fund (NCF) for administration by the ONSA.

The circular reads: “Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and pursuant to the provision of Section 44 (2)(a) of the Act, ‘a levy of 0.5% (0.005) equivalent to a half per cent of all electronic transactions value by the business specified in the Second Schedule of the Act’, is to be remitted to the National Cyber-security Fund (NCF), which shall be administered by the Office of the National Security Adviser (ONSA)”.

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The key directives outlined in the circular include: the levy is to be applied at the point of electronic transfer origination, with financial institutions responsible for deduction and remittance. Deducted amounts shall be reflected in the customer’s account with the narration: “Cyber-security Levy.”

In addition, deductions are to commence within two weeks of the circular issuance, with monthly remittances to the NCF account by the fifth business day of every subsequent month.

The financial institutions are directed to complete system reconfigurations for timely submission of remittance files to the Nigeria Interbank Settlement System (NIBSS) Plc. within specified timelines. Failure to remit the levy is deemed an offence, with penalties including fines of not less than 2 percent of the annual turnover of defaulting businesses.

Certain transactions were exempted from the levy to avoid multiple applications. The Schedule of Exemptions from Cyber-security Levy, outlined transactions exempted from the levy, including loan disbursements and repayments, salary payments, intra-account transfers, and transactions involving educational institutions particularly, educational Institutions transactions, including tuition payments and other transaction involving schools, universities, or other educational institutions.

Others include, Intra-bank transfers between customers of the same bank; Other Financial Institutions (OFIs) instructions to their correspondent banks; Inter-bank placements; banks’ transfers to CBN and vice-versa; inter-branch transfers within a bank; Cheques clearing and settlements; Letters of Credits (LCs).

Banks’ recapitalisation related funding – only bulk funds movement from collection accounts; savings and deposits including transactions involving long-term investments such as Treasury Bills, Bonds and Commercial Papers; government Social Welfare Programmes transactions e.g. Pension payments; non-profit and charitable transactions, including donations to registered non-profit organisations or charities and transactions involving bank’s internal accounts.

The apex bank listed the affected accounts as: suspense accounts, clearing accounts, profit and Ioss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts and escrow accounts.

The circular directed all institutions under CBN’s regulatory control to comply with the provisions of the Act and the circular.