The House of Representatives yesterday asked the Central Bank of Nigeria (CBN) to withdraw the circular directing all banks to commence charging a 0.5 percent cybersecurity levy on all electronic transactions within the country.
The motion on the need to halt and modify the implementation of the cybersecurity levy was moved by the member representing the Obio/Akpor Constituency, Kingsley Chinda.
The circular, which was directed to all commercial, merchant, non-interest, and payment service banks, among others; said the implementation of the levy would start two weeks from May 6, 2024 (May 20).
“The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy,’” the circular partly read.
In the motion, Chinda said: “The House notes that businesses which the said Section 44(2)(a) refers to are listed in the Second Schedule to the Cybercrimes Act to be GSM Service Providers and all telecommunication companies; Internet Service Providers; Banks and Other Financial Institutions; Insurance Companies and the Nigerian Stock Exchange.
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“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 the same.
“The wordings of the CBN circular leaves the 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,” the lawmaker noted.
The development, according to the lawmaker, “has led to apprehension as civil society organisations and citizens have taken to conventional and social media to call out the Federal Government to give ultimatums for a reversal of the ‘imposed levy on Nigerians’ among other things.”
He argued that unless immediate pragmatic steps are taken to stop the proposed action of the CBN, “The Cybercrime Act shall be implemented in error at a time when Nigerians are experiencing the aftermath of multiple removal of subsidies from petroleum, electricity and so on and the rising inflation.”
In another development, the Chairman of the Senate Committee on National Security and Intelligence, Senator Shehu Umar Buba, yesterday justified the proposed implementation of the Cybersecurity levy by the CBN.
Bubba, in a statement yesterday, clarified that the levy was not punitive as it has numerous exemptions to protect and relieve ordinary citizens, particularly the poor.
According to him, the exemptions include salary payments, intra-account transfers, loan disbursements and repayments, and other financial transactions, adding that the amendments to the Cybercrimes Act were a collaborative effort with the National Assembly’s ICT and Cyber Security Committee.
He said: “The committee also underwent a transparent public hearing process, receiving contributions from various stakeholders. Both Houses of the National Assembly unanimously passed it before President Bola Ahmed Tinubu signed it into law.”
Buba emphasised that the provisions for the cybersecurity levy have been in place since 2015 but were delayed due to unclear interpretations and applications.
He said: “The Cybercrimes Act of 2015 has had provisions for imposing a cybersecurity levy since its enactment, but the vagueness of Section 44 led to different interpretations until the 2024 amendments.
“The levy is 0.5%, equivalent to half a percent of the value of all electronic transactions by businesses specified in the Second Schedule to the Act.
“The amendments addressed crucial gaps in the Act and empowered the nation to implement the National Cybersecurity Programme effectively.
“They also seek to realign and empower the country to combat the inadequate funding and disruptive effects of cyber threats on national security and critical economic infrastructures,” he said.
He underscored how critical the cybersecurity levy’s implementation is, stating that its prudent utilisation will bolster the nation’s capacity to evaluate, execute, upgrade, and fortify the security of national critical economic infrastructure, thereby safeguarding the nation’s cyberspace.
The Committee commended the Office of the National Security Adviser (NSA) and the CBN for initiating the operationalising of the cybersecurity levy, highlighting its benefits far outweigh its drawbacks.
He expressed appreciation to the leaders and representatives of MDAs at the federal and state levels and all stakeholders who contributed to its success.
While maintaining that the Committee’s mandate was to create laws that aligned with the aspirations of Nigerians, he appealed for public support, assuring that the policy would yield maximum benefits for citizens in the shortest possible time.
Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024 and under the provision of Section 44 (2)(a) of the Act, 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, which the Office of the National Security Adviser shall administer.
Though the announcement created controversy, the circular exempted some transactions from cybercrime levy.
The exemptions included loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, intra-bank transfers between customers of the same bank, and Other Financial Institutions (OFIs) instructions to their correspondent banks.
The exemption also applies to interbank placements, banks’ transfers to CBN and vice versa, inter-branch transfers within a bank, cheque clearing and settlements, and Letters of Credit (LCs).
Others include 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.
Others were government social welfare programmes transactions, e.g. pension payments; non-profit and charitable transactions including donations to registered non-profit organisations or charities; educational institutions transactions, including tuition payments and other transactions involving schools, universities, or other academic institutions.
