- The Federal Government realised N133.89 billion as revenue from the Electronic Money Transfer Levy in eight months of 2024
- The amount is 76 per cent of the government’s projected revenue of N175.11 billion from EMTL in 2024
- The government is targeting N228.85 billion as revenue from EMTL in 2025
Between January and August this year, the Federal Government collected a total of N133.89 billion from Nigerians as Electronic Money Transfer Levy (EMTL).
This is contained in the 2025-2027 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
Analysis shows that the amount realised within the period represents 76 per cent of the N175.11 billion government’s projected revenue from EMTL in 2024, as contained in the 2024 budget.
The EMTL, which is pegged at N50, is deducted by banks on behalf of the Federal Government for every electronic transaction of N10,000 and above and shared among the three tiers of government through the Federal Accounts Allocation Committee (FAAC).
EMTL revenue is shared at 15 per cent by the Federal Government, 50 per cent by state governments, and 35 per cent by local governments.
According to the October FAAC revenue shared by the three tiers of government, N17.111 billion was realised as revenue from EMTL, with the Federal Government receiving N2.567 billion, state governments receiving N8.555 billion, and Local Government Councils receiving N5.989 billion.
FG targets more money
According to the MTEF/FSP document, the government has increased its revenue target from the EMTL for the 2025 fiscal year by 31 per cent to N228.85 billion.
The government hopes to achieve more EMTL collection in 2025 as it has expanded the levy from commercial banks to transactions carried out on all fintech platforms.
Recall that fintechs such as Opay, Moniepoint, PalmPay and Kuda notified customers on September 7 of the commencement of deduction of N50 as EMTL for every N10,000 and above received by customers from September 9.
The fintechs said the deduction followed a directive from the Federal Inland Revenue Service (FIRS) and was not a source of revenue for them.
The announcement drew widespread condemnation from Nigerians, including the National Association of Nigerian Students (NANS), Point of Sale (PoS) operators, and economists. All cited the added burden of the policy on Nigerians.
However, the deduction didn’t take effect until December 1, after fintechs notified their customers of the implementation of the policy on November 30.
Will levy threaten fintechs’ unique selling point?
With millions of customers in Nigeria in just a few years of operation, fintechs have redefined electronic banking with innovations like lightning speed, mobile, real-time, boundless transactions, and cheaper or fewer charges.
Fintechs, such as Flutterwave, Opay, PalmPay, Moniepoint, Kuda, etc., have become widely accepted for these innovative approaches to banking, further widening their contribution to the growth of digital payments in Nigeria.
Their popularity may have been tested, approved and trusted in early 2023 during the now botched naira redesign and cashless policy of the CBN, leading to a significant cash crunch in the country. The fintechs demonstrated resilience during the period, ensuring transaction settlements that exposed vulnerabilities in many traditional banking platforms.
With fintechs such as Opay already charging customers N10 after their third transfer to other banks in a day, the N50 EMTL charges pose a threat to their ‘no-charges-apply’ unique selling point.
What is 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.
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.
