President Bola Tinubu

Strong indications emerged that commercial bank customers in Nigeria would have to grapple with more charges with effect from January 1, 2024, as the Federal Government has imposed yet another tax on electronic transfers it calls Electronic Money Transfer Levy EMTS.

According to a memo by the Federal Inland Revenue Service FIRS, all commercial banks operating in the country have been mandated to deduct and remit the new EMTL on foreign currency FCY transactions. The memo says that this deduction, which takes immediate effect is in line with the implementation of section 48 of the Finance Act 2020 and section 89a (1) of the Stamp Act 2004 as amended, which imposes a levy known as the Electronic Money Transfer Levy EMTL on recipients of any electronic receipts or transfers of ₦10,000 or above on any type of account in a deposit money bank or financial institution.

It was further gathered that in compliance with the new directive, some of the commercial banks have already notified their customers of an immediate deduction of ₦50 (fifty naira) only, which will apply to every foreign currency FCY transaction with an equivalent amount of ₦10,000 and above.

This deduction, according to memos sent by some of the commercial banks to their customers, will commence immediately and will be remitted to the FIRS as mandated by regulatory authorities.

Investigations further showed that the FIRS has instructed the commercial banks to deduct the Electronic Money Transfer Levy on qualifying transactions processed from January 2021 to the last week of December 2023, which will also be remitted accordingly.

The banks while appreciating the understanding and cooperation of their numerous customers, stated that they are obliged to ensure compliance with regulatory requirements and guidelines of the government.

It was however not possible to get expert opinions on the likely economic implications of these new taxes, especially on remittances and other foreign exchange-related transactions on raw materials, plants and equipment and other goods for production. This is partly given the galloping inflationary trends in the country, especially food inflation, which is suffocating most of the citizens.