New Telegraph

FG earns N31.08bn from electronic transfers levy

 

The Electronic Money Transfer Levy (EMTL) revenue component of disbursements by the Federation Account Allocation Committee (FAAC) to the three tiers of government between January and February, this year, amounted to N31.08 billion, findings by New Telegraph show.

The amount is N8.05 billion or 20.57 per cent less than the N39.13 billion EMTL generated by the Federal Inland Revenue Service (FIRS) in the corresponding period of 2023.
An analysis of communiqués of the Federation Account Allocation Committee (FAAC) meetings for the first two months of the year indicates that the EMTL revenue disbursed to the three tiers of government amounted to N15.92 billion and N15.16 billion in January and February respectively.

The EMTL, introduced by the Federal Government in Finance Act, 2020 to tap into the growth in electronic funds transfer in Nigeria, is a singular and one-off levy of N50 on the recipient of any electronic receipts or transfers of N10,000 or above.
For equivalent receipts or transfers carried out in other currencies, the levy is charged at the exchange rates determined by the Central Bank of Nigeria (CBN).

The levy, which applies to all account types, came into effect in January 2021 and is an amendment of the Stamp Duty Act, under which, N50 used to be levied on electronic payments above N1,000.

Under the Finance Act 2020, revenue derived from the EMT levy is shared based on derivation and distributed at 15 per cent to the Federal Government and Federal Capital Territory, 50 percent to the state governments, and 35 per cent to the 774 local governments.

For instance, a statement issued by the Office of the Accountant General of the Federation, on the outcome of the FAAC meeting held, last week, said that the FAAC shared a total sum of N1.15 trillion total distributable revenue comprising distributable statutory revenue of N101.34 billion, distributable Value Added Tax (VAT) revenue of N428.80 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.15 billion and exchange difference revenue of N607.44 billion.

Specifically, the statement said: “Total revenue of N2.326 billion was available in the month of February 2024. Total deduction for cost of collection was N66.456 billion; total transfers, interventions and refunds was N856.937 billion and savings was N250.000 billion.

“Gross statutory revenue of N1,192.428 billion was received for the month of February 2024. This was higher than the sum of N1,151.808 billion received in the month of January 2024 by N40.620 billion.

“The gross revenue available from the Value Added Tax (VAT) in February 2024 was N460.487 billion. This was higher than the N420.733 billion available in the month of January 2024 by N39.755 billion.”

It added that from the N15.15 billion EMTL, the Federal Government got N2.27 billion; the state governments were given N7.57 billion; and the local governments received N5.30 billion.
Analysts note that with the increased adoption of e-payment in the country in recent years, EMTL revenue generated by the FIRS will continue to head north.

In fact, data obtained from the National Bureau of Statistics (NBS) shows that EMTL revenue generated by FIRS increased from N114 billion in 2021, to N125.67 billion and N181.17 billion in 2022 and 2023 respectively.

Interestingly, in its 2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, the Budget Office of the Federation had projected that the nation would rake in at least N137.03 billion in 2023, N157.59 billion in 2024, and N189.11 billion in 2025, from the EMT levy.

Analysts believe that FIRS will again surpass the FG’s projection for EMT levy that would be generated this year. Reason: at the end of last year, Deposit Money Banks (DMBs) in the country started notifying their customers, via emails, that they were set to begin EMTL deductions on all foreign currency transactions in line with the directive of the FIRS.

Some of the emails indicated that the lenders would begin the deductions from January 2, 2024.

For instance, one of such emails, which a Tier 1 bank sent to its customers, partly read: “Previously, the Electronic Money Transfer Levy (EMTL) 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 transfers levy on FCY inflows from January 2021 to December 2023 are also to be deducted by January 31, 2024.”

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