Nigeria to Commence N50 E-Money transaction levy

Starting September 9, 2024, Nigeria will begin enforcing the Electronic Money Transfer Levy (EMTL) on financial transactions. The levy, which amounts to a flat charge of N50 on electronic transfers and deposits of N10,000 and above, will apply to both foreign currency inflows and Nigerian transactions.

The Federal Inland Revenue Service (FIRS) announced that banks and financial institutions are required to deduct the levy on qualifying transactions and remit it to the federal government. This fee is part of a wider effort to boost non-oil revenues and was introduced under the Finance Act of 2020. Recent developments indicate the charge will also apply retroactively to foreign currency deposits made between January 2021 and December 2023.

The levy is seen as a way to increase government revenue, especially in light of efforts to expand non-oil income streams in the 2024 budget. The FIRS has also issued clear directives to ensure compliance among financial institutions.

The Finance Act of 2023 stipulates that the revenue generated from the Electronic Money Transfer Levy (EMTL) shall be distributed across the three tiers of government based on a derivation formula. Under this provision, the federal government will receive 15%, state governments 50%, and local governments 35% of the total EMTL proceeds.

The regulations further require receiving banks to collect and remit the levy to the Federal Inland Revenue Service (FIRS) on the next working day after the transaction, or within a timeframe prescribed by the FIRS. Additionally, if the recipient is a walk-in customer without an account at the bank, the levy must be deducted from the amount payable before it is disbursed.