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The Central Bank of Nigeria (CBN) has instructed that all banks must impose a cybersecurity tax of 0.5% on all transactions. The levy will be used for cybersecurity efforts and infrastructure to protect electronic transactions from potential threats.&nbsp; 
According to the CBN circular released, the levy is set to take effect two weeks after the announcement on May 6, 2024. And, it will be administered by the Office of the National Security Adviser (ONSA), the announcement detailed. 
The circular reads, in part: 
“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 per cent (0.005) equivalent to a half per cent of all electronic transactions valued by the business specified in the Second Schedule of the Act, is to be remitted to the National Cybersecurity Fund, which shall be administered by the Office of the National Security Adviser,” the circular stated. 
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’,” it said. 
The Apex Bank gave this public notice through its directors of Payment System Management and Financial Policy and Regulation Departments, Chibuzor Efobi and Haruna Mustafa 
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 <img loading="lazy" decoding="async" src="https://technext24.com/wp-content/uploads/2024/05/image-7.png" alt="Salaries, Intrabank transfers, and 14 other transactions free from CBN 0.5% cybersecurity tax" class="wp-image-231175" width="510" height="626">
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While the tax covers most electronic transactions, the CBN has also outlined specific exemptions to ease the burden on citizens and businesses. The following transactions are free from the new tax regime. 
Read also: <a href="https://technext24.com/2024/02/27/cbn-gov-26bn-passed-binance-nigeria/">CBN Gov says $26bn from unidentified people passed through Binance Nigeria in the last year</a> 
<ol> 
 <li>Loan Disbursements and Repayments: Individuals and businesses taking out loans or making repayments are not subject to the 0.5% tax.</li> 
 <li>Salary Payments: Salary deposits remain untouched by the cybersecurity tax, ensuring employees receive full pay without additional deductions.</li> 
 <li>Intrabank Transfers: Transfers between accounts within the same bank, whether for the same customer or between different customers, are exempt from the tax.</li> 
 <li>Other Financial Institutions (OFIs) Transactions: OFIs making payments to their correspondent banks are not subject to the tax.</li> 
 <li>Interbank Placements and Transfers: Banks making transfers to the CBN or vice versa and branch-to-branch transfers within a bank are exempt.</li> 
 <li>Cheque Clearing and Settlements: The cybersecurity levy does not apply to cheque clearing and settlements.</li> 
 <li>Letters of Credit (LCs): Transactions involving LCs are also exempt from the tax.</li> 
 <li>Bank Recapitalization: Transfers related to bank recapitalization, such as bulk funds movement from collection accounts are exempt.</li> 
 <li>Savings and Deposits: Long-term investments such as Treasury Bills, Bonds, and Commercial Papers, are exempt.</li> 
 <li>Government Social Welfare Programmes: Transactions related to social welfare programs, such as pension payments, are exempt.</li> 
 <li>Non-Profit and Charitable Transactions: Donations to registered non-profit organisations or charities are exempt.</li> 
 <li>Educational Institutions: Transactions that involve payment to schools, universities, and other related institutions are exempt.</li> 
 <li>Bank’s Internal Accounts: Transfers involving internal bank accounts, including suspense, clearing, and escrow accounts, are exempt.</li> 
</ol> 
<h5 id="what-the-0-5-cybersecurity-tax-means-for-citizens" class="wp-block-heading">What the 0.5% Cybersecurity Tax Means for Citizens</h5> 
Recall that <a href="https://technext24.com/2023/03/07/gbb-foils-1-2-cyber-attacks-in-elections/">last year</a>, the Nigeria Information Technology and Shared Services provider, Galaxy Backbone Limited, said it countered over 1.2 million attempted cyber attacks during the 2023 Presidential and National Assembly elections on the 25th of February. 
According to Muhammad Abubakar, the managing director, the agency spent about $4 billion to secure the portal of the country’s umpire on the election day. Now, It seems the government has decided to place the cost of securing the cyberpace on its citizens. 
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</figure> 
While the cybersecurity levy aims to bolster the safety and security of electronic transactions, it may also place additional financial strain on citizens and businesses. Consumers may face higher costs on certain transactions, prompting them to adjust their banking habits. 
The new cybersecurity levy adds to the existing financial pressures on Nigerians, particularly given the recent economic challenges such as fuel subsidy removal and the floating of the naira. Many citizens worry that the new levy will further burden their finances and affect their ability to conduct business. 
<h5 id="too-many-taxes" class="wp-block-heading">Too many taxes?</h5> 
There are also reports that the government is set to introduce the <a href="https://businessday.ng/technology/article/fg-eyes-telecom-tax-to-boost-revenue/" target="_blank" rel="noopener">telecom tax</a>, which was first suggested in 2022 and kicked against before it was suspended. At the time, it was pegged at 5 per cent. In July 2023, Bola Tinubu, the President of Nigeria, ordered its suspension. 
With the many challenges the Nigerian economy currently grapples with, it would be expected that the government and its agencies strike a balance between improving cybersecurity and avoiding excessive taxation.&nbsp;

Salaries, loans, transfers: A list of 14 transactions exempt from the 0.5% cybersecurity tax

Technext.ng

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