Jan 20, 2025

The Federal Government’s revenue on the Electronic Money Transfer Levy (EMTL) surged to N31.2 billion in December 2024 following the introduction of the levy to transactions made on Fintech platforms, making it the highest of any month. The record, contained in revenue-sharing data released by the Federation Account Allocation Committee (FAAC), explained that the December revenue surpassed the N15.046 billion recorded in November by 107 per cent. This increase was spurred by the inclusion of financial technology platforms like Opay, Kuda, Moniepoint and others into the tax net. It was also revealed that the three tiers of government comprising Federal, State, and Local governments shared a total of N1.424 trillion based on collected statutory revenue, Value Added Tax (VAT), and electronic money transfer levy collected in December. The announcement of EMTL charge on Opay app The levy, introduced under the Finance Act 2020, was announced to take effect from September 9. In a notice sent to its users on September 7, Opay emphasized that the levy was imposed by the Federal Inland Revenue Service (FIRS) with no benefit to the company. “Please be informed that starting September 9, 2024, a one-time of N50 will be applied to electronic transfers of N10,000 and above paid into your personal or business account in compliance with the Federal Inland Revenue Service (FIRS) regulations. It is important to note that Opay does not benefit from this charge in any way as it is directed entirely by the federal government,” the company expressed. The commencement of the payment of the electronic money transfer levy by fintechs ended the 100 per cent free transactions on the platforms. Then, fintech companies clarified that the levy is directly from the federal government through the FIRS. “It is important to note that OPay does not benefit from this charge in any way as it is directed entirely to the Federal Government,” OPay had stated in a notice to its customers about the deduction. The company also explained that the electronic levy deduction begins on December 1, 2024. “Dear Customer, in line with the FIRS, the EMTL applies starting from December 1st, 2024,” the message reads. The electronic money transfer levy is a one-time N50 e-levy charge on transactions above N10,000. It applies to all electronic transfers of funds in a Nigerian-licensed bank or financial institution. The levy, previously applicable only to commercial banks, has now been extended to fintech companies which has now ended the era of free banking services that many of these platforms offered. In addition, revenues from the electronic money transfer levy are distributed among the government tiers with the Federal Government receiving 15%, state governments receiving 50%, and local governments getting 35%. More projected gains from the electronic money transfer levy The document, which provides details of the historical performance of budget forecasts and estimates of government revenues and expenditures also stated that Nigerian bank customers paid a total of N133.89 billion as levy between January and August 2024. This represents 76.5 per cent of the N175.11 billion forecasted for the entire year. In addition, it also revealed that N169.43 billion was realised from the e-levy in 2023, up from the N136.35 billion projected. The paper also shows that the 2024 retained revenue for the same period was N9.83 trillion, while N12.84 trillion was recorded for last year. However, the total revenue for 2025 was estimated at N34.82 trillion, 34.6 per cent more than the 2024 projected revenue. While the government is setting sights on generating more revenue, it has estimated the electronic money transfer revenue for 2026 and 2027 at N265 billion and N305 billion respectively. In total, the government estimates to have received a total of N800 billion in e-levy revenue. With the N31.2 billion generated in December, the government is on the run to achieve its N230 billion revenue projection on EMTL for 2025. Meanwhile, it targets more revenue from the e-levy.