The expansion of the Electronic Money Transfer Levy (EMTL) to transactions on fintech platforms pushed the Federal Government’s revenue from this source to N31.2 billion in December 2024, the highest monthly record.
According to the December revenue-sharing data released by the Federation Account Allocation Committee (FAAC), this represents a 107% increase in EMTL revenue for the government compared to the N15.046 billion recorded in November.
For December 2024, 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 EMTL collected in the month.
Fintechs deduction of EMTL
Fintechs like PalmPay, OPay, and Moniepoint, among others, started deducting the EMTL from their customers’ transactions on December 1, 2024.
- The deductions apply to transfers received from N10,000 upwards.
- While customers of some of the fintechs had enjoyed 100% free transactions on the platforms the introduction of the EMTL brought that era to an end.
“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 extension of EMTL to fintechs was no doubt part of the government’s efforts to shore up its revenue, which is paying off going by the December EMTL revenue growth.
What you should know
The Electronic Money Transfer Levy (EMTL) is a one-time charge of N50 on electronic money transfers or receipts in Nigeria. It applies to all electronic transfers of funds in a Nigerian-licensed bank or financial institution, with the following exceptions:
- Transfers under N10,000
- Money paid into one’s own account
- Money transferred electronically between accounts of the same owner within the same bank
The EMTL was introduced in the Finance Act 2020 to encourage the growth of electronic funds transfers in Nigeria. Revenue from the EMTL is shared among the three tiers of government.
Revenue derived from the EMTL is shared among the three tiers of government based on derivation, with the Federal Government receiving 15%, state governments receiving 50% and local governments getting 35%.
- In December 2023, the FIRS also directed deposit banks to deduct and remit the EMTL on foreign currency (FCY) transactions going forward.
- Before that time, the N50 charge on transactions from above N10,000 was only applicable to local currency transactions.
- The banks in January last year began the deduction of EMTL on old foreign currency transactions covering 2021 to 2023 as directed by the tax regulator.