The Central Bank of Nigeria (CBN) has withdrawn its directive to banks and financial institutions regarding the implementation of a 0.5% cybersecurity levy on electronic transactions. The decision follows a directive from the House of Representatives and the federal government to suspend the levy.
The levy, initially mandated under the Cybercrime (Prohibition, Prevention, etc.) (Amendment) Act 2024, was intended to fund the National Cybersecurity Fund (NCF) and support cybersecurity initiatives. However, concerns were raised about its potential impact on consumers and businesses.
The NCF, established under the Act, is designed to receive funds from various sources, including the levy, grants, contributions, and appropriations. Contributions to the Fund are incentivized through tax exemptions and deductions.
While the Act outlines the allocation of funds for cybersecurity initiatives, it also allows for a portion, not exceeding 40%, to be directed towards countering violent extremism (CVE) programs.
This reversal highlights the ongoing debate surrounding cybersecurity funding and the balance between security measures and their potential impact on economic activities.
