The Central Bank of Nigeria (CBN) recently issued a directive to all commercial, merchant, non-interest, and payment service banks, among others; to begin the deduction of a 0.5 per cent cybersecurity levy on e-transactions.
The National Cyber Security Fund, which is to be administered by the Office of the National Security Adviser (NSA), gets its roots from the Cybercrime (Prohibition, Prevention, etc.) Amendment Act, which mandates a 0.5 per cent deduction from the value of all electronic transactions.
The CBN circular pointed out that the directive was a follow-up to an earlier letter dated June 25, 2018 (Ref: BPS/DIR/GEN/CIR/05/008) and October 5, 2018 (Ref: BSD/DIR/GEN/LAB/11/023), respectively, on compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015.
Some exemptions were, however, made by the CBN. The 16 e-transactions exempted from paying the cybersecurity levy are:
1. Loan disbursements and repayments
2. Salary payments
3. Intra-account transfers within the same bank or between different banks for the same customer
4. Intra-bank transfers between customers of the same bank
5. Other Financial Institutions instructions to their correspondent banks
6. Interbank placements,
7. Banks’ transfers to CBN and vice-versa
8. Inter-branch transfers within a bank
9. Cheque clearing and settlements.
10. Letters of Credits
11. Banks’ recapitalisation-related funding – only bulk funds movement from collection accounts
12. Savings and deposits, including transactions involving long-term investments such as Treasury Bills, Bonds, and Commercial Papers.
13. Government Social Welfare Programmes transactions e.g. Pension payments
14. Non-profit and charitable transactions, including donations to registered non-profit organisations or charities
15. Educational institutions’ transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions
16. Transactions involving bank’s internal accounts such as suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.
With this development, the number of levies or fees banks’ customers have to pay for carrying out transactions is now five. They are:
Cybersecurity levy
N5 is charged for every N1,000 transaction
N50 is charged for N10,000 transaction
N500 is charged for a transaction of N100,000
N5,000 is charged for a transaction of N1,000,000; and
N50,000 is charged for a transaction of N10,000,000.
Transfer fee
Each time a bank customer carries out a transaction,
N10 is charged for transactions below N5,000
N25 is charged for transaction between 5,001 and N50,000; and
N50 is being charged on transactions above N50,000
Stamp duties
For every transaction between N10,000 and N10,000,000, a stamp duty fee of N50 is charged.
Short Messaging Service (SMS)
Banks and other financial institutions charge N4 for every short message (SMS) sent. This is, however, optional as customers could opt for e-mail notifications which are not charged for.
Value Added Tax
Banks customers are also charge Value Added Tax (VAT) for transactions as follows:
N0.75 is charged on N10 transfer fee
N1.875 is charged on N25 transfer fee
N3.75 is charged on N50 transfer fee.
