FG mandates cybersecurity levy on electronic transactions: what you need to know
In a significant move aimed at bolstering cybersecurity measures, the Federal Government has issued directives for commercial banks and financial institutions to initiate a cybersecurity levy on electronic transactions. This development, disclosed in a circular signed by Chibuzor Efobi, Director of Payments System Management, and Haruna Mustafa, Director of Financial Policy and Regulation, marks a pivotal step in safeguarding Nigeria’s digital landscape.
The circular, disseminated to all commercial, merchant, non-interest, and payment service banks, elucidated the modalities for implementing the levy, slated to commence within two weeks of the announcement. Emphasizing the legislative foundation for this initiative, the circular referenced the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024, which mandates a levy equivalent to 0.5% of all electronic transaction values. The proceeds of this levy are earmarked for the National Cybersecurity Fund, administered by the Office of the National Security Adviser.
Key Highlights of the Cybersecurity Levy:
1. Legislative Mandate: Enacted under the Cybercrime (Prohibition, Prevention, etc) (Amendment) Act 2024, the cybersecurity levy applies to electronic transactions conducted within Nigeria’s financial ecosystem.
2. Deduction Mechanism: The levy will be deducted directly from the accounts of electronic transaction originators, ensuring seamless compliance and transparency in levy collection.
3. Transaction Narration: Following deduction, customers will find a corresponding entry in their account statements labeled “Cybersecurity Levy,” delineating the purpose of the deduction and its alignment with cybersecurity initiatives.
4. Utilization of Funds: All proceeds from the levy will be channeled to the National Cybersecurity Fund, overseen by the Office of the National Security Adviser, to finance critical cybersecurity infrastructure and initiatives.
5. Commencement Timeline: Implementation of the cybersecurity levy is scheduled to commence within two weeks of the circular’s issuance, signaling a swift transition toward enhanced cybersecurity protocols.
The directive underscores the government’s proactive stance in addressing cyber threats and fortifying the nation’s digital resilience against evolving security challenges. With cybercrime posing a pervasive threat to economic stability and national security, the imposition of this levy represents a concerted effort to mobilize resources and foster collaborative cybersecurity endeavors across sectors.
As financial institutions prepare to operationalize the levy, stakeholders are urged to familiarize themselves with its implications and ensure compliance with regulatory mandates. The collective commitment to cybersecurity resilience will be instrumental in safeguarding Nigeria’s digital infrastructure and fostering a secure environment for electronic transactions.
Amidst the evolving cyber threat landscape, the introduction of the cybersecurity levy heralds a proactive stride towards fortifying Nigeria’s digital defenses and bolstering confidence in its burgeoning digital economy.
