Financial technology companies have begun implementing levies on electronic transfers to personal and business accounts, in adherence to regulations set by the Federal Inland Revenue Service.
One of the fintechs, Opay in a notice to its customers said, “Dear valued customers, please be informed that starting September 9, 2024, a one-time fee of N50 will be applied for electronic transfers of N10,000 and above, paid into your personal or business account in compliance with the Federal Inland Revenue Service regulations.”
They have clarified that the newly implemented transfer fees are not a source of revenue for their platforms but rather a government requirement.
“It is important to note that OPay does not benefit from these charges in any way, as it is directed entirely to the Federal Government,” the notice read.
Financial technology companies have introduced new transfer fees in response to the Federal Government’s efforts to generate revenue from electronic transactions through regulations imposed by the Federal Inland Revenue Service (FIRS).
Users of various fintech platforms, including Moniepoint and PalmPay, have reported the implementation of these charges. The Electronic Money Transfer Levy Regulations, 2022, issued by former Finance Minister Zainab Ahmed, outline the framework for the imposition, administration, collection, and remittance of the levy.
A key provision of the regulations is a one-time levy of N50 on the recipient of any electronic receipt or transfer exceeding N10,000.
For transfers in other currencies, the levy will be charged at exchange rates determined by the Central Bank of Nigeria; the FIRS is appointed as the administrator of the Levy and is responsible for assessing, collecting, and accounting for the Levy.
It noted that the receiving banks are required to collect and remit the Levy to the FIRS by the next working day or on a date prescribed by the FIRS. For walk-in customers without accounts, the levy must be deducted from the amount payable.
Also, banks must prepare daily lists of cancelled or reversed transactions, detailing the transferee’s name, transaction amounts, levies deducted, and amounts reversed or cancelled. Levies on reversed or cancelled transactions should be deducted from the next day’s collections and returned to affected customers.
Banks are also required to submit monthly returns of the levies collected, including details of reversals and cancellations, to the FIRS within 21 days after each month.
Additionally, banks must retain records of all electronic transfers on which levies are collected for a minimum of seven years.
The Electronic Money Transfer Levy Regulations, 2022, outline strict penalties for non-compliance with the new transfer fees. Banks that fail to collect the levy will be subject to a 150% penalty of the uncollected amount. Additionally, banks that collect the levy but fail to remit it will face a 50% penalty and interest calculated at the Central Bank of Nigeria’s Monetary Policy Rate.
Furthermore, failure to submit accurate returns or render returns altogether will result in a 10% penalty based on the unrendered or incorrectly rendered returns.
Banks are defined under the regulations as “a deposit money bank or financial institution referred to under Section 89A of the SDA, including all banks and other financial institutions defined under the Banks and Other Financial Institutions Act, 2020.”
This article was written by Tamaraebiju Jide, a student at Elizade University
