Federal Inland Revenue Service (FIRS) has notified deposit money banks in Nigeria to deduct and remit N50 electronic money transfer levy (EMTL) on foreign currency (FCY) transactions from the first week of January 2021 to the last week of December 2023.
In a statement by the tax agency, it said “We will commence the deduction of the sum of fifty naira only on every foreign currency transaction with the equivalent amount of N10,000 and above going forward and remit it to the relevant authority.”
This mandate is in line with the Finance Act 2020 and Stamp Act 2004, which imposes an EMTL on the transfer of money deposited in any financial institution or any type of account.
The EMTL levy provides additional sources of revenue for the federal government and has been deducted from other economic activities including energy.
In August, the Central Bank of Nigeria (CBN) unveiled draft operational rules and regulations for in-country clearing and settlement of foreign currency (FCY) fund transfers among Nigerian banks.
The move seeks to enable faster, cheaper, and more transparent FCY transfers to create an efficient and safe operation of FCY transfers amongst Nigerian banks and improve the efficiency of the in-country FCY transfers, leading to greater confidence in the payment system.
The central bank said the settlement of clearing balances shall be accorded the highest priority for settlement under the new regime.