Effective 9 September 2024, Nigerian fintechs will start deducting a N50 Electronic Money Transfer Levy (EMTL) from every inflow of N10,000 or more. Fintechs like Moniepoint, OPay have started informing their customers of this development. This deduction is in line with the Federal Inland Revenue Service (FIRS) directive.
Hitherto, the levy was applicable only to commercial banks. Henceforth, fintech platforms will be mandatorily included in the collection of the levy which is collected on behalf of the federal government. This marks the end of free banking services that some fintechs previously offered.
The Electronic Money Transfer Levy (EMTL) is a one-time charge of N50 applied to electronic transfers or receipts in Nigeria. It is levied on all electronic fund transfers in banks and financial institutions licensed in Nigeria, with certain exemptions:
- Transfers below N10,000
- Transfers to one’s own account
- Electronic transfers between accounts of the same owner within the same bank
Introduced under the Finance Act 2020, the EMTL aims to promote electronic fund transfers within the country. The revenue generated from this levy is distributed across the three levels of government, with the Federal Government receiving 15%, state governments 50%, and local governments 35%.
In December last year, the Federal Inland Revenue Service (FIRS) instructed deposit banks to start deducting and remitting the EMTL on foreign currency (FCY) transactions, in addition to local currency transactions. Previously, the N50 charge only applied to local currency transactions exceeding N10,000. In January this year, banks began deducting EMTL on foreign currency transactions retroactively, covering the period from 2021 to 2023, as directed by the tax authorities.
In reaction to the commencement of the levy, Oladimeji Uthman, Senate Clerk of the National Association of Nigerian Students (NANS) National Headquarters, has urged the Federal Inland Revenue Service (FIRS) and the Federal Government to reconsider and reverse the recently implemented Electronic Money Transfer Levy (EMTL).
Uthman advised the Federal Government to diversify its revenue streams by investing in sectors like agriculture, quality education, infrastructure development, and job creation, instead of placing additional financial burdens on students and ordinary citizens.
