January 03, (THEWILL) – Nigeria’s deposit money banks have announced that they will comb their customers’ accounts to deduct the backlog of Electronic Money Transfer Levy (EMTL) on old foreign currency transactions.
The deductions, which will be effected in January 2023, will cover all the affected transactions between 2021 and 2023,.
In a message sent by the banks to their customers on Tuesday, the lenders noted that the action was in line with the directive from the Federal Inland Revenue Service (FIRS).
Last month, the FIRS directed deposit money banks to deduct and remit the EMTL on foreign currency (FCY) transactions going forward.
The tax body said the levy was in line with the Finance Act 2020 and Stamp Act 2004, which impose an EMTL on the transfer of money deposited in any financial institution on any type of account.
Before the latest directive, the N50 charge on transactions from above N10,000 was only applicable to local currency transactions.
In a notice to the customers sent on Tuesday, a Tier-1 lender, Access Bank, said:
“We write to inform you of the Federal Inland Revenue Service (FIRS) notice to all banks, in line with the Finance Act 2020 and Stamp Act 2004, to remit the Federal Government Electronic Money Transfer Levy from foreign currency (FCY) inflows.
“Previously, the Electronic Money Transfer Levy was solely applicable to accounts receiving electronic deposits of N10,000 and above or its equivalent. However, starting January 2, 2024, the deduction will be extended to FCY inflows equivalent of N10,000 and above, incurring a charge of N50 (FCY equivalent).
“In compliance with this notice, outstanding Electronic Money Transfer Levy on FCY inflows from January 2021 to December 2023 are also to be deducted by January 31, 2024. We appreciate your understanding and thank you for trusting Access Bank.”
THEWILL recalls that in September 2023, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mohammed Bello Shehu, while providing an update on remittances to the federation account, revealed that the sum of N83.02 billion accounted for revenues from the electronic money transfer levy out of which N3.32 billion was paid to FIRS as cost of collection between January and June 2023.
The policy directive is coming on the heels of excruciating hardship encountered by bank customers over intense cash shortage that has hampered smooth business transactions across the country.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
