The Federal Inland Revenue Service (FIRS) has directed banks to commence the deduction of the sum of N50 as electronic money transfer levy (ETML) from foreign currency (FCY) transactions.
The EMTL is a single, one-off charge of N50 on electronic receipt or transfer of money deposited in any commercial money bank or financial institution on any type of account on sums of N10,000 and above.
Revenue derived from the EMTL is shared among the three tiers of government by the federation account allocation committee (FAAC).
In separate emails banks sent to customers, FIRS said the directive follows the implementation of section 48 of the Finance Act of 2020, and section 89a (1) of the Stamp Duty Act of 2004.
The agency also asked financial institutions to apply the deductions on foreign currency transactions executed from January 1, 2021 (when the Finance Act became effective) to December 2023.
ACCESS, FIRST, POLARIS BANKS BEGIN COMPLIANCE
In compliance with the directive, Access Bank said the EMTL deduction on international transactions in arrears of three years (2021 to 2023) will commence from January 31, 2024.
“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),” Access said in a notice.
“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.”
Similarly, Polaris Bank also announced that compliance with FIRS’ directive would begin from January 2, 2024, noting that the funds will be remitted to the federal government.
Polaris told customers that deductions of N50 would also be made on previous FCY transactions that were executed over the aforementioned three years period.
First Bank also informed customers about the development, stating that the levy would be imposed on “recipients of any electronic receipts or transfers of N10,000 or above on any type of account”.
“This deduction will commence immediately and will be remitted to the FIRS as mandated by regulatory authorities,” First Bank said.
“Furthermore, the FIRS has instructed the deduction of the EMTL on qualifying transactions processed from January 2021 to the last week of December 2023. This will also be remitted accordingly.”
Other commercial banks, such as Stanbic IBTC, Union Bank, and the Guaranty Trust Bank (GTB), recently announced the implementation of the policy.
President Bola Tinubu aims to achieve a $1 trillion economy by 2026.
On November 20, 2023, Wale Edun, the minister of finance, said the streamlining and widening of the tax net is paramount in achieving the government’s revenue goals.
Edun, addressing lawmakers at the lower chamber of the national assembly on December 12, 2023, called for a centralised revenue collection system which the FIRS will spearhead.