Tinubu calls on CBN to suspend cybersecurity levy

ABUJA (Sundiata Post) – Apparently responding to public outcry, President Bola Tinubu has called on the Central Bank of Nigeria to suspend implementation of the controversial cybersecurity levy policy and ordered a review. Sunday punch Reports.

Sources with knowledge of Tinubu’s position on the issue, however, said the President was aware of the economic burden on Nigerians since the start of his tough economic reforms last May, adding that he did not want to risk increasing the burden with further levies.

A senior presidential official, who did not wish to be named, told our correspondent: “The President is sensitive to the sentiments of Nigerians. And he will not want to continue implementing policies that increase the burden on people.

“Therefore, he has asked the CBN to shelve this policy and ordered a review. I would have said that he ordered the CBN, but that is not appropriate because the CBN is autonomous. But he asked the CBN to stop and check things again.”

Another presidential official, who spoke on condition of anonymity because he was not authorized to speak on the issue, said those discrepancies prompted the president to order a review.

“If you look at it, the law predates the Tinubu administration. It was enacted in 2015 and signed by Goodluck Jonathan. It is only now being implemented.

“You know he (Tinubu) was not there when this directive was circulated. And he doesn’t want to portray his government as insensitive. As it stands now, the CBN has withheld directing banks to start charging fees. So the president is sensitive. His aim is not to simply tax Nigerians. That is not his intention. That is why he has ordered a review of this law.”

This followed the decision of the House of Representatives last Thursday, which asked the CBN to withdraw its circular directing all banks to impose a cybersecurity levy of 0.5 percent on all electronic transactions in the country.
There is public outrage over the planned introduction of the cybersecurity levy.

Peter Obi, the opposition Labor Party’s presidential candidate in the 2023 election, described the proposed levy as a form of exploitation of a dying economy and questioned when the NSA office became a tax collector.

Northern elders and SERAP also protested against the levy and called on Tinubu to put an end to it.

Sundiata Post Recalls that on May 6, 2024, the CBN issued a circular requiring all banks, mobile operators and payment service providers to implement a new cybersecurity levy in accordance with the provisions of the Cybercrime (Prohibition, Prevention, etc.) (Amendment) Act 2024.

Under the law, a levy of 0.5 percent of the value of all electronic transactions is collected and remitted to the National Cybersecurity Fund, which is overseen by the Office of the National Security Adviser.

Financial institutions are required to collect the levy at the time of electronic transfer.

The deducted amount must be explicitly noted in the customer account under the name “Cybersecurity Levy” and paid by the financial institution. All financial institutions are required to start implementing the levy within two weeks of publication of the circular.

Consequently, deduction of the levy by financial institutions should begin on May 20, 2024.

However, financial institutions must transfer their bulk remittances to the NCF account at the CBN by the fifth business day of each subsequent month.

The circular also sets out a time frame within which financial institutions must reconfigure their systems to ensure complete and timely submission of remittance files to Nigeria Interbank Settlement Systems Plc as follows: “Commercial, commercial, non-interest and payment services banks – within four weeks after the circular was issued.

“All other financial institutions (microfinance banks, primary mortgage banks, development financial institutions) – within eight weeks of issuance of the circular,” the circular said.

The CBN emphasizes strict compliance with this mandate and warns that any financial institution that fails to comply will face severe penalties. As outlined in the law, if convicted, companies that fail to comply will be subject to a fine of at least two percent of their annual turnover.

The circular contains a list of transactions that are currently considered exempt in order to avoid multiple application of the levy.

These include loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer and intra-bank transfers between customers of the same bank.

Exceptions include transfers from other financial institutions to their correspondent banks, inter-bank placements, transfers from banks to CBN and vice versa, transfers between branches within a bank, check clearing and settlement, letters of credit and bank recapitalization financing.

Others involve mass movements of funds from collection accounts, savings, and deposits, including transactions in long-term investments such as Treasury bills, bonds, and commercial paper, as well as transactions in government welfare programs.

These may include pension payments, charitable and charitable transactions, including donations to registered non-profit organizations or charities, educational institution transactions, including tuition payments and other transactions involving schools, universities or other educational institutions, and transactions affecting the Bank’s internal accounts. include , branch accounts, reserve accounts, nostro and vostro accounts and trust accounts.

The introduction of the new levy elicited mixed reactions from stakeholders as it is believed to increase the cost of doing business in Nigeria and could potentially hamper the growth of digital transaction adoption.