FG Sends Message to Zenith, Access, Others Over Charges on FX Transactions on Customers' Accounts
- The Nigerian government has directed banks to begin deducting Electronic Transfer Levy on FX transactions
- The FIRS said the move aligns with relevant laws and the Finance Act 2020
- Some commercial banks have already sent notice of execution to their customers
Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
The Federal Inland Revenue Service (FIRS) has asked commercial banks to remit Electronic Money Transfer Levy (EMTL) on foreign currency transactions.
The levy aligns with the 2020 Finance and Stamp Duty Act 2004, which imposes EMTL on transfers for money deposited in any financial institution on any account.
Source: UGC
Banks begin compliance with EMTL on FX transactions
Reports say financial institutions have begun complying with the directive and have informed their customers of the new development.
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The notice of remittance of EMTL, sent to customers by one of the major banks, told them of the deduction of N50 on every foreign currency transaction with an equivalent of N10,000 and above going forward.
The notice added that the amounts deducted would be remitted to the relevant tax bodies.
It further stated that it would deduct EMTL on eligible transactions from the first week of January 2021 to the last week of December 2023.
The levy provides additional revenue for the Nigerian government and is deducted from other economic activities, including energy.
According to a ThisDay report, the Chairman of the Revenue Mobilisation and Fiscal Commission (RMAFC), Mohammed Bello Shehu, said that about N83.02 billion accounted for revenues from electronic money transfer levy, out of which N3.32 billion was remitted to the FIRS as collection cost between January and June 2023.
CBN's rules mandates deduction of EMTL on FX transactions
In August 2021, the Central Bank of Nigeria (CBN) disclosed operational guidelines and regulations for in-country clearing settlement of foreign currency fund transfers among Nigerian banks.
The Apex bank said the move is to enable faster, cheaper, more transparent, and safer operation of foreign currency transfers among banks, improving the efficiency and confidence in in-country foreign currency transfers.
According to the CBN, the settlement of clearing balances shall be the highest priority for payment under the new regime.
The CBN said the new guideline provides measures to address some challenges facing the current system for switching foreign currency transfers among Nigerian banks, including their high cost.
FG Earns N80.86 billion from Electronic Transfer Levy in 6 Months
Legit.ng reported that the Nigerian government earned N80.86 billion from Electronic Transfer Levy in the first six months of 2023.
Electronic Transfer Levy replaces Stamp Duty and deducts from every electronic deposit of N10,000 and above.
The information is according to Data from the Federal Account Allocation Committee.
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Source: Legit.ng
