Opay and moniepoint deduction.
Fintech businesses, including OPay, Moniepoint, and others, have started the deduction of N50 Electronic Money Transfer Levy (EMTL) from every inflow of N10,000 or more received by their customers.
This mandated deduction brings to an end free banking services provided by some fintechs, despite the fact that the charges are paid to the federal government.
Moniepoint had earlier pre informed it’s customers about the deduction by sending out messages which read:
“A fee of N50 will be imposed on inflows of N10,000 or more from Monday, September 9, 2024. “Your BRM is available to answer any questions you may have.”
On their side, OPay informed its clients that the deduction is for EMTL, as ordered by the federal government.
“Please be advised that beginning September 9th, 2024, a one-time fee of N50 will be levied on electronic transfers of N10,000 or more made into your personal or business account in accordance with Federal Inland Revenue Service (FIRS) regulations.”
“It’s crucial to understand that OPay does not benefit from this charge in any way because it is solely focused at the federal government,” they stated.
The EMTL, which previously exclusively applied to commercial banks, has now been extended to all fintech companies, including Palmpay and Paga, among others.
This new development may be related to the federal government’s efforts to increase revenue through taxation and levies.
What you should Know.
The Electronic Money Transfer Levy (EMTL) is a one-time N50 fee for electronic money transfers or receipts in Nigeria. It applies to all electronic transfers of funds within a Nigerian-licensed bank or financial institution, with the following exceptions: Transfers under N10,000.
Money transferred into one’s own account, Money electronically moved between accounts with the same owner inside the same bank within the same week.
The EMTL was incorporated into the Finance Act 2020 to promote the expansion of electronic payments transfers in Nigeria. Revenue from the EMTL is distributed across the three levels of government.
Based on the derivation, the federal government receives 15%, state governments receive 50%, and local governments receive 35%.
In December of last year, the FIRS also instructed deposit banks to deduct and remit the EMTL on foreign currency.
Previously, the N50 tax on transactions above N10,000 was exclusively applied to local currency transactions.
As mandated by the tax regulator, banks began deducting EMTL on old foreign currency transactions between 2021 and 2023 in January of this year.
