This! If you’ve heard the recent rumors about the Central Bank of Nigeria (CBN) implementing a cybersecurity tax on transactions, you may be wondering what that means for you. Let’s break it together.
So what’s the deal with this tax?
Well, according to the recent circular of the CBN, banks are now required to charge 0.5% (i.e. 0.005 in decimal form) on the value of electronic transactions. The move is in line with the Cyber Crimes (Prohibition, Prevention, etc.) (Amendment) Act, 2024, which aims to strengthen the National Cyber Security Fund.
How is tax calculated?
Calculating this tax may sound difficult but it is not rocket science. You have two options:
- Multiply your trade amount by 0.5 then divide by 100.
- Just multiply your trade amount by 0.005.
For example, if you send N10,000 to a friend, you will be looking at a N50 cyber security tax using either of these two methods.
What is tax-exempt, you ask?
Good question! CBN has kindly provided a list of 16 banking transactions that are exempt from this tax. Loan disbursement, debt repayment and salary payments are among the lucky exemptions.
So how does this affect you?
It’s worth noting that this tax will be charged to your electronic transactions along with any other fees you’ve paid to the bank. It’s a good idea to keep this in mind when you’re budgeting or planning your finances.
Wrap it up
While this levy is intended to strengthen Nigeria’s cybersecurity defenses, as a customer you need to understand how it impacts your wallet. Being informed about the tax and its implications can help you navigate your financial transactions more smoothly.
