The Senate has clarified that the newly introduced 0.5% cybersecurity levy on some banking transactions by the Federal Government was not meant to punish Nigerians as it has numerous exemptions to protect and relieve ordinary citizens, particularly the poor.
The chairman of the Senate Committee on National Security and Intelligence, Senator Shehu Umar Buba, disclosed this while addressing the controversy surrounding the proposed implementation of the Cybersecurity Levy by the Central Bank of Nigeria (CBN).
According to him, the exemptions include; salary payments, intra-account transfers, loan disbursements and repayments, and other financial transactions.
LEADERSHIP reports that the the levy is provided for in the Cybercrimes (Prohibition, Prevention, etc) (Amendment) Act, 2024.
Senator Buba said the amendments to the Cybercrimes Act were a collaborative effort with the National Assembly’s ICT and Cyber Security Committee. The committee also organised a transparent public hearing process, receiving contributions from various stakeholders. Both Houses of the National Assembly unanimously harmonised and adopted the law before President Bola Ahmed Tinubu signed it into law.
Senator Umar emphasised that the provisions for the cybersecurity levy had been in place since 2015 but were delayed due to unclear interpretations and applications.
“The Cybercrimes Act of 2015 has 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 per cent 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.
Senator Umar underscored the imperativeness of the cybersecurity levy’s implementation, 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 legislative committee commended the Office of the National Security Adviser (ONSA) and CBN for initiating the operationalisation of the cybersecurity levy, highlighting that its benefits far outweigh its drawbacks.
He expressed appreciation to the leaders and representatives of MDAs at the federal and state levels, as well as all stakeholders who contributed to the success of the efforts.
While maintaining that the Committee’s mandate is to create laws that align with the aspirations of Nigerians, he appealed for public support, assuring that the policy will 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 per cent equivalent to 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 Cybersecurity Fund, which the Office of the National Security Adviser shall administer.
Though the announcement created controversy, the circular exempted some transactions from the 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; 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 transaction involving schools, universities, or other academic institutions.