FIRS Mandates Banks to Deduct N50 Electronic Money Transfer Levy on Every N10,000 Transfer

The Federal Inland Revenue Service (FIRS) has ordered all banks in Nigeria to start deducting a compulsory N50 Electronic Money Transfer Levy (EMTL) on every transfer of N10,000 and above. This levy is in line with the Finance Act 2020 and Stamp Act 2004, which imposes an EMTL on the transfer of money deposited in any financial institution or any type of account.

What is the Electronic Money Transfer Levy?

The Electronic Money Transfer Levy is a tax imposed on electronic transfers of money in Nigeria. The levy is charged at a flat rate of N50 on every transfer of N10,000 and above. This means that for every transfer of N10,000 or more, the sender will be charged an additional N50, which will be deducted by the bank.

When Does the Levy Take Effect?

The levy has been in place since 2021, but it seems that FIRS is now enforcing it more strictly. OPay, a popular mobile payment platform, has also announced that it will start deducting the N50 levy on transfers of N10,000 and above, effective September 9, 2024.

How Will the Levy Affect Nigerians?

The introduction of the Electronic Money Transfer Levy is likely to be met with resistance from Nigerians who are already struggling with high transaction costs and economic hardship. The levy will increase the cost of transactions, particularly for individuals and businesses that rely heavily on electronic transfers.

What Do the Banks Say?

The banks have confirmed that they will comply with the FIRS directive and start deducting the N50 levy on transfers of N10,000 and above. The banks have also assured their customers that they will provide more information on the levy and how it will affect their transactions.

Conclusion

The introduction of the Electronic Money Transfer Levy is a significant development in Nigeria’s financial sector. While the levy is expected to provide additional revenue for the federal government, it is likely to increase the cost of transactions for individuals and businesses. As the levy takes effect, it remains to be seen how Nigerians will react to this new development.