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CBN bows to pressure, withdraws circular on implementation of cybersecurity levy

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The Central Bank of Nigeria (CBN) has withdrawn its earlier circular directing financial institutions to implement the national cybersecurity levy.

The circular, issued on May 6, 2024 with reference PSMD/DIR/PUB/LAB/017/004, mandated commercial banks, mobile money operators, and other financial institutions to collect a 0.5 percent levy on all electronic transactions.

This move comes amid widespread public criticism and concerns raised by various stakeholders regarding the levy’s potential impact on the financial sector and the overall economy.

Critics argued that the levy would be an additional burden on Nigerians already grappling with rising inflation.

Additionally, concerns were raised about the clarity and transparency of the implementation process outlined in the initial circular.

The latest CBN circular is in response to the President’s order as he had last week, ordered the suspension of the National Cybersecurity levy.

The CBN’s decision to withdraw the circular is contained in a new directive jointly signed by the Director, Payments System Management Department, Mr. Chibuzo A. Efobi, and the Director, Financial Policy and Regulation Department, Mr. Haruna B. Mustafa.

The new circular, titled “RE: Cybercrimes

(Prohibition, Prevention, etc) (Amendment) Act 2024-Implementation Guidance on the collection and remittance of national levy)” simply states that the previous circular is withdrawn with no further explanation provided.

The decision to enforce the National Cybersecurity levy was met with public outcry and fears that the levy had the potential to hinder economic activity.

The new circular suggests the CBN may be re-evaluating its approach to funding cybersecurity initiatives.

Nigerians who had braced themselves for the additional levy are likely to welcome this development.

However, questions remain regarding the government’s alternative plans for financing cybersecurity efforts in the country.

It is expected that the CBN and relevant authorities will provide further clarification on the future of the National cybersecurity levy and potential alternative solutions in the coming days.

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