• Monday, March 04, 2024
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Banks begin deduction of e-money transfer levy on foreign currency transactions

Banks expected to see boost in core operations this year

Nigerian banks have begun deduction of N50 electronic money transfer levy (EMTL) on foreign currency (FCY) transactions.

The Federal Inland Revenue Service (FIRS) has mandated commercial banks to deduct and remit the electronic money transfer levy on foreign currency transactions.

This followed the implementation of the Finance Act 2020 Section 48 and Stamp Act 2004 Section 89A (1) as amended, which imposes a levy known as the Electronic Money Transfer Levy (EMTL) on recipients of any electronic receipts or transfers of N10,000 or above on any type of account in a deposit money bank or financial institution.

Consequently, some banks have issued a notice to their customers on the immediate dedication of the levy.

First Bank of Nigeria, in a notice titled, ‘Important Notice: Electronic Money Transfer Levy Deductions Begin on Foreign Currency Transactions’, said deduction will commence immediately and will be remitted to the FIRS as mandated by regulatory authorities.

“In compliance with this directive, a deduction of Fifty naira (N50) only will be applied to every foreign currency (FCY) transaction with an equivalent amount of N10,000 and above,” the bank said.

According to the bank, the FIRS has instructed the deduction of the Electronic Money Transfer Levy on qualifying transactions processed from January 2021 to the last week of December 2023. This, it said, would also be remitted accordingly.

Union Bank said it would begin to deduct the N50 electronic transfer levy for all international transactions from January 1, 2024.

Stanbic IBTC Bank in March 2023, announced the dedication of N50 levy on electronic money transfer from Domiciliary accounts.

According to KPMG, the Electronic Money Transfer Levy Regulations, 2022, were issued to provide guidance for the imposition, administration, collection and remittance of the Electronic Money Transfer Levy introduced by the Finance Act, 2020.

The Regulations provide for 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 will be charged at the exchange rates determined by the Central Bank of Nigeria (CBN), KPMG said.