Through the Electronic Money Transfer Levy, the Federal Government expects to generate N483.73 billion in revenue from the surge in electronic payments over the course of three years.
In its Medium Term Expenditure Framework and Fiscal Strategy Paper for 2023–2025, the Budget Office of the Federation produced this forecast. The Stamp Duty Act was modified by the Finance Act 2020 to include the EMTL in order to take advantage of the country’s expanding use of electronic payments transfers.
A single, one-time fee of N50 is applied to any amount above N10,000 that is electronically received or transferred from any bank or financial institution that accepts deposits. Revenue derived from the EMTL is shared among the three tiers of government.
According to the budget office, which is under the Ministry of Finance, Budget and National Planning, the nation intends to make at least N137.03bn in 2023, N157.59bn in 2024, and N189.11bn from EMTL.
The office further revealed that the government made N111.84bn from the levy in 2021. Since the outset of the pandemic, e-payment transactions have soared because of mass adoption, improved broadband coverage, and increased stability of payment gateways.
Data from the Nigeria Inter-Bank Settlement System (NIBSS) portal reveal that the total value of electronic transactions in the four months of 2022 (N117.33tn) is already higher than the total amount of transactions in 2019 (N108.42tn).
In 2020, it was N162.89tn and N278.38tn in 2021. According to the NIBSS, e-payments adoption payments surged as people transitioned to electronic channels for funds exchange in the wake of the pandemic.
The International Monetary Fund added that the value of mobile money transactions in the nation increased to 9.72 per cent of the Gross Domestic Product in 2020 because of the COVID-19 pandemic.
The Head, Corporate Communications, NIBBS, Lilian Phido, said, “It is very clear that more and more people are accepting the available channels of payment and the platforms are stable.
“With stability, these components have grown. With stability more and more people moving.”
Commenting on the government’s projection, the National President, of the Association of Mobile Money Agents in Nigeria, Victor Olojo, said, “Yes it will continue to increase with the boom. From what I know about the levy, it is a stamp duty championed by the Nigerian Postal Service for the Federal Government.
“It is a huge meaningful source of revenue to them, although it might not be as significant. For every transaction above N10,000 that enters your account, the stamp duty is automatically deducted. It is a big win for the Federal Government.”
“However, it has an impact on businesses. For some merchants, say a supermarket that does about 100 transactions in a day and gets charged N50 on each transaction, this is away from the cost of running the business. It would have been nice if the value of this N50 payment is seen in form of basic amenities.
“Presently, it appears like a rip-off as businesses still have to pay taxes, Value Added Tax, without commensurate impact. It harms businesses since there is no visible impact.”
