BREAKING: Nigerian Government Directs Banks, Moniepoint, Opay, and Others to Begin N50 Deductions from Customers Starting Today

Fintech companies, including OPay and Moniepoint, have begun notifying customers about the implementation of a ₦50 Electronic Money Transfer Levy (EMTL) on all inflows of ₦10,000 or more. This change, effective from September 9, follows a directive by the Federal Inland Revenue Service (FIRS). The levy, part of Nigeria’s tax system, aims to generate revenue for the government and is remitted to the FIRS....CONTINUE READING>>>

Previously, fintech platforms attracted users by offering low-cost or free banking services, particularly benefiting small businesses, students, and low-income earners. However, this new policy aligns fintech operations with traditional banking regulations.

Key Details of EMTL Implementation:

• Application: A one-time ₦50 fee is charged on every electronic transfer of ₦10,000 or more. Transactions in foreign currencies are also subject to the levy, calculated at Central Bank of Nigeria (CBN) exchange rates.
• Revenue Distribution: Proceeds from the levy are shared among government tiers:
  • Federal Government: 15%
  • State Governments: 50%
  • Local Governments: 35%
• Remittance Requirements: Receiving banks and financial institutions must deduct and remit the levy to the FIRS by the next business day. For walk-in customers without accounts, the deduction is made directly from the transaction amount.

The levy was initially introduced in the Finance Act of 2019 to amend the Stamp Duty Act (SDA) and became more entrenched through the Finance Act of 2023. As of the first five months of 2024, the government reported generating ₦78.95 billion from EMTL collections. This revenue supports critical fiscal strategies aimed at reducing reliance on oil revenue.

This policy is expected to impact users who have relied on free transaction services but is considered essential for government revenue generation.