Nigerian banks will deduct the backlog of Electronic Money Transfer Levy (EMTL) on old foreign currency transactions carried out by Nigerians on January 31, 2024.
The deductions will cover transactions between 2021 and 2023 according to the message sent by the banks to their customers on Tuesday. The banks noted that this is in line with the directive from the Federal Inland Revenue Service (FIRS).
Last month, the FIRS directed deposit banks to deduct and remit the EMTL on foreign currency (FCY) transactions going forward. The tax body said the levy is 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.
Notice to bank customers
In a notice to the customers sent on Tuesday, one of the banks 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.”
What you should know
Earlier in September last year, 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.
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.
When this administration came into power, I believed that rent seeking would constitute a major part of their economic policy.