September 9, 2024– Starting Monday September 9, leading fintech companies in Nigeria, like OPay and Moniepoint, commenced the deduction of a N50 Electronic Money Transfer Levy (EMTL) on all inflows of N10,000 and above as they notified their customers. This move follows a directive from the Federal Inland Revenue Service (FIRS).
The introduction of this levy marks the end of free banking services offered by many fintech firms, attracting a significant number of customers, particularly small businesses, students, and low-income individuals.
The N50 levy is imposed on recipients of electronic receipts or transfers of N10,000 or more. For transactions in foreign currencies, the levy is calculated based on the Central Bank of Nigeria’s exchange rate.
In December 2023, the FIRS directed deposit money banks to deduct and remit Electronic Money Transfer Levy (EMTL) on foreign currency (FCY) transactions going forward. Within the first five months of this year, a total of N78.95bn was accrued to the government from the N50 levy imposed on electronic bank transfers.
Since its implementation, the EMTL has generated substantial revenue for the government, with a total of N78.95 billion accrued in the first five months of 2024.
The Finance Act of 2023 outlines the distribution of this revenue among the federal, state, and local governments as 15%, 50%, and 35% respectively.
Receiving banks are obligated to collect and remit the levy to the FIRS within the next business day following the transaction. If the recipient is a walk-in customer without an account, the levy is deducted from the payable amount.
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