Nigerian financial institution clients have together contributed ₦133.89 billion in electronic money transfer levies (EMTL) to the authorities between January and August this year. This figure turned into the sales generated from the ₦50 levy carried out to digital transfers of ₦10,000 and above. The EMTL, added below the Finance Act of 2020, goals to sell using digital budget transfers whilst bolstering authorities’ sales.
The sales derived are sent throughout the 3 degrees of authority: the Federal Government gets 15%, country governments 50%, and local governments 35%. According to the 2025-2027 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), the sum amassed to this point is money owed for 76% of the ₦175.11 billion goal set in the 2024 budget. This exhibits the significance of EMTL as a dependable supply of public sales.
Expansion to Fintech Platforms
The authorities plan to grow sales from Electronic Money Transfer Levies by increasing its scope to encompass transactions on economic technology (fintech) structures. By 2025, projections display that EMTL collections ought to upward push to ₦228.85 billion, a 31% growth from the 2024 goal.
Fintech groups inclusive of OPay, PalmPay, and Moniepoint currently started deducting the ₦50 levy on transfers above ₦10,000, in compliance with directives from the Federal Inland Revenue Service (FIRS).
Although the authentic implementation date turned into set for September, enforcement started on 1 December 2024. This turned into the give up of loose switch offerings formerly presented through those structures, as they now remit the expenses immediately to the federal authorities.
Understanding the EMTL
The levy applies as a one-time price on eligible transfers performed thru banks and authorized economic institutions. However, there are a few exemptions, including:
Transfers below ₦10,000.
Funds deposited into the payer`s account.
Transfers between accounts owned by the same individual within the same bank.
Initially applied only to local currency transactions, the FIRS extended the levy to cover foreign currency transfers in December 2023. In compliance, banks began deducting the charge retroactively on foreign currency transactions from 2021 to 2023.
While the levy bolsters government revenue, it also has an impact on citizens, particularly with the introduction of charges by fintech platforms.
The end of free banking services, once a competitive edge for fintechs, increases the cost burden on customers who rely on these platforms for convenience and accessibility.
