Deposit Money Banks (DMBs) in Nigeria will start the deduction of the backlog of Electronic Money Transfer Levy (EMTL) on old foreign currency transactions carried out by Nigerians on January 31, 2024.
According to the latest directive from the fiscal authorities to the banks, the deductions will cover transactions between 2021 and 2023.
As expected, the DMBs had started sending messages to their customers in line with the directive from the Federal Inland Revenue Service (FIRS).
It would be recalled that the FIRS had last month directed deposit banks to deduct and remit the EMTL on foreign currency (FCY) transactions going forward, saying that the levy is in line with the Finance Act 2020 and Stamp Act 2004, which impose an EMTL on the transfer of money deposited in any financial institution on any type of account.
Before the December 2023 directive, the N50 charge on transactions from above N10,000 was only applicable to local currency transactions.
In a notice to its customers on Tuesday, one of the banks clarified: “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”, the lender added.
It would be recalled that the Central Bank of Nigeria (CBN) in August 2023, unveiled draft operational rules and regulations for in-country clearing and settlement of foreign currency (FCY) fund transfers among Nigerian banks.
According to the apex bank, the initiative is designed to enable faster, cheaper, and more transparent FCY transfers to create an efficient and safe operation of FCY transfers amongst the DMBs and improve the efficiency of the in-country FCY transfers, leading to greater confidence in the payment system.
It promised the settlement of clearing balances shall be prioritized for settlement under the new regime.
Also in September 2023, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Mohammed Bello Shehu, while updating the public on remittances to the federation account, disclosed that the sum of N83.02 billion accounted for revenues that accrued to the account from EMTL out of which N3.32 billion was paid to FIRS as cost of collection between January and June 2023.
