Nigerian banks are gearing up to deduct the backlog of Electronic Money Transfer Levy (EMTL) on past foreign currency transactions conducted by Nigerians by January 31, 2024. This move aligns with the Federal Inland Revenue Service (FIRS) directive, as communicated to customers by the banks on Tuesday.
The deductions will encompass transactions spanning from 2021 to 2023, as instructed by the FIRS.
Last month, the tax body directed deposit banks to deduct and remit EMTL on foreign currency (FCY) transactions, citing compliance with the Finance Act 2020 and Stamp Act 2004.
These regulations impose an EMTL on the transfer of money deposited in any financial institution across various account types.
Prior to this recent directive, the N50 charge on transactions exceeding N10,000 was only applicable to local currency transactions. In a notice to customers sent on Tuesday, one of the banks explained the changes and the ensuing procedures.
“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.”
In September of the previous year, the chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mohammed Bello Shehu, disclosed that N83.02 billion in revenues from the electronic money transfer levy was recorded between January and June 2023. Out of this, N3.32 billion was paid to FIRS as the cost of collection.
In August, the Central Bank of Nigeria (CBN) introduced draft operational rules and regulations for in-country clearing and settlement of foreign currency (FCY) fund transfers among Nigerian banks. The initiative aims to enhance the speed, cost-effectiveness, and transparency of FCY transfers, fostering an efficient and secure operation within Nigerian banks. The central bank emphasised that the settlement of clearing balances would receive top priority under the new regime.
