- The Federal Government has started deducting N50 as EMTL on transactions of N10,000 and above on fintechs
- Fintechs notified customers that the levy takes effect from December 1, 2024
- Fintechs had earlier announced the commencement of EMTL deductions, which was met with objections from Nigerians
The Federal Government, through the Federal Inland Revenue Service (FIRS), has begun deducting N50 as Electronic Money Transfer Levy (EMTL) on transactions of N10,000 and above made by users of fintech companies, including Opay, Moniepoint, Kuda, and others.
In notices to customers, Opay and Moniepoint stated that the N50 EMTL deductions take effect from December 1, 2024.
In a terse message sent to users on Saturday, November 30, and also on its app, Opay said the N50 EMTL charges align with FIRS’ directive and commence on December 1, 2024.
The message read, “Dear Customer, in line with the FIRS, the EMTL applies starting from December 1st, 2024.”
Africa’s eighth unicorn, Moniepoint, also sent a notice to its customers on Saturday, November 30, stating the commencement of the deductions, adding that it collects the levy and remits the same to the FIRS.
Moniepoint’s notice read, “Dear customer, you will be charged stamp duty of N50 on inflows of N10,000 and above. Moniepoint collects and remits this on behalf and to FIRS.”
The N50 EMTL deductions have commenced as users of fintechs, especially Opay and Moniepoint, are now charged N50 for transactions of N10,000 and above.
Fintechs had announced the commencement of N50 EMTL
The transfer levy was part of the 2020 amendments made under Section 89A(3) of the Stamp Duties Act Cap. S8 Laws of the Federation of Nigeria, 2004 (SDA) and introduced by the Finance Act of 2021.
It aims to bolster government revenue given that electronic payment transactions increased by 55 per cent in 2023 to N600 trillion from N387 trillion in 2022, setting an all-time high since the introduction and adoption of electronic payment in the country, according to the Nigeria Inter-Bank Settlement System (NIBSS).
The EMTL regulations guide imposition, administration, collection and remittance of the levy, with a key provision including a one-time levy of N50 on the recipient of any electronic receipts or transfers of N10,000 or more.
Fintechs announced the deduction of the N50 transfer levy on September 7, which was supposed to take effect from September 9. They added that the levy is entirely directed to the Federal Government and not a revenue source.
A notice from Opay read, “Dear valued customers, please be informed that starting September 9, 2024, a one-time fee of N50 will be applied for electronic transfers of N10,000 and above, paid into your personal or business account in compliance with the Federal Inland Revenue Service regulations.
“It is important to note that OPay does not benefit from these charges in any way, as it is directed entirely to the Federal Government.”
Introduction of EMTL was met with objections
The introduction of the EMTL was met with opposition from Nigerians, who argued that the policy was ill-timed.
Various groups, including the National Association of Nigerian Students (NANS), called on the Federal Government to reverse its position on implementing the levy, citing the financial strain it will cause students.
Similarly, economists maintain that the policy will hurt the economy and ground fintechs in the long run. They argue that the government should instead focus on regulation, especially in the face of ongoing cybersecurity threats and loan sharks.
Also, Point of Sale (PoS) operators, who majorly make use of fintechs for their operations, were also not in support of the policy, saying it has affected their profit margin.
The operators stated that there was the possibility of a review of charges, as they had charged N100 on transactions less than N5,000 and N200 on N10,000 before the electronic transfer levy was announced by fintechs.
With growth of digital payment in Nigeria, is cash still king?
Meanwhile, TheRadar reported that the value of digital transactions increased 47.4 times between 2013 and 2023 to reach N657.8 trillion from N13.9 trillion, representing an average monthly figure of N54 trillion over the 10 years.
With the growth in digital transactions, driven by Nigeria’s young demographic, fintech innovations and the policies of the Central Bank of Nigeria, one wonders if cash is still king.
