₦‎50 Electronic Levy Deductions On Transactions Start Across Fintech Platforms

in the midst of the Tax reform bill controversy, the deduction of the N50 Electronic transfer levy for transactions above N10,000 have started across Fintech payment platform.

This begs the question how this will encourage cashless policy?

It is regressive in my own opinion. A peasant receiving N10,000 is parting away with 0.5% of his income while a well-established business receiving N100,000 will be parting away with only 0.05%.

This will discourage cashless policy on many fronts.

The Federal Government (FG) has commenced the implementation of the N50 Electronic Money Transfer Levy (EMTL) on transactions of ₦10,000 and above conducted through financial technology (fintech) companies such as Opay, Moniepoint, Kuda, and others. Introduced under the Finance Act 2020, the EMTL is a one-off levy charged to the recipient of any electronic receipt or transfer of ₦10,000 or more.

Initially slated to take effect from September 9, 2024, its implementation was delayed until December 1, 2024, following public opposition. Various groups, including the National Association of Nigerian Students (NANS), had urged the Federal Government to reconsider the levy, citing economic hardships faced by Nigerians. In compliance with directives from the Federal Inland Revenue Service (FIRS), fintech companies have now begun deducting the levy. Notifications sent to customers by fintech platforms confirm that the levy is now active.

Opay, in a message to its users on Saturday, December 1, reiterated its compliance with FIRS regulations, stating:
“Dear Customer, in line with the FIRS, the EMTL applies starting from December 1, 2024.”
The company clarified that the deductions are remitted entirely to the federal government and that it does not benefit from the charges. Click

Similarly, Moniepoint announced the commencement of the levy deductions in a notice to its customers, explaining:
“Dear customer, you will be charged stamp duty of ₦50 on inflows of ₦10,000 and above. Moniepoint collects and remits this on behalf and to FIRS.”
This development has sparked renewed criticism, with many Nigerians expressing concerns about the impact of the deductions on already strained personal and business finances. While the EMTL aims to generate additional revenue for the government, its implementation underscores the growing burden of levies on electronic transactions in the country.