As more Nigerians embrace Central Bank of Nigeria’s cashless policy, the Electronic Money Transfer Levy (EMTL) revenue disbursements by the Federation Account Allocation Committee (FAAC) to the three tiers of governmentFederal Government, states and local government councils amounted to N129.40 billion between January and August this year, findings by New Telegraph show.
The amount is N5.65 billion or 4.57 per cent higher than the N123.75 billion EMTL generated by the Federal Inland Revenue Service (FIRS) in the corresponding period of 2023. An analysis of communiqués of the Federation Account Allocation Committee (FAAC) meetings and relevant National Bureau of Statistics (NBS) data for the first eight months of the year, shows that the EMTL revenue disbursed to the three tiers of government amounted to N15.92 billion in January; N15.16 billion in February; N14.75 billion in March; N18.02 billion in April; N15.15 billion in May; N15.78 billion in June; N19.60 billion in July and N15.02 billion in August. T
he EMTL, which was introduced by the Federal Government in Finance Act, 2020 to tap into the growth in electronic funds transfer in the country, is a singular and one-off levy of N50 on the recipient of any electronic receipts or transfers of N10,000 or above. For equivalent receipts or transfers carried out in other currencies, the levy is charged at the exchange rates determined by the Central Bank of Nigeria (CBN).
The levy, which applies to all account types, came into effect in January 2021 and is an amendment of the Stamp Duty Act, under which, N50 used to be levied on electronic payments above N1,000. Under the Finance Act 2020, revenue derived from the EMT levy is shared based on derivation and distributed at 15 percent to the Federal Government and Federal Capital Territory, 50 percent to the state governments and 35 percent to the 774 local governments.
The press release issued by the Director, Information and Public Relations at the Federal Ministry of Finance, Mohammed Manga, at the end of the September meeting of the FAAC, for instance, said: “The communique issued by the Federation Account Allocation Committee (FAAC) at the end of the meeting indicated that the Gross Revenue available from the Value Added Tax (VAT) for the month of August 2024, was N573.341 billion as against N625.329 billion distributed in the preceding month, resulting in a decrease of N51.988 billion.
“From that amount, the sum of N22.934 billion was allocated for the cost of collection and the sum of N16.512 billion given for Transfers, Intervention and Refunds. The remaining sum of N533.895 billion was distributed to the three tiers of government, of which the Federal Government got N80.084 billion, the States received N266.948 billion and Local Government Councils got N186.863 billion.”
The statement further said:“Also, the sum of N15.643 billion from Electronic Money Transfer Levy (EMTL) was distributed to the three (3) tiers of government as follows: the Federal Government received N2.252 billion, States got N7.509 billion, Local Government Councils received N5.256 billion, while N0.626 billion was allocated for Cost of Collection.”
While the amount generated from EMTL in August was lower compared to the previous month, analysts expect increased adoption of e-payment in the country to result in the FIRS generating more EMTL revenue in coming years. Indeed, data obtained from the NBS shows that EMTL revenue generated by FIRS increased from N114 billion in 2021, to N125.67 billion and N181.17 billion in 2022 and 2023 respectively.
Also, in its 2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, the Budget Office of the Federation had projected that the country would rake in at least N137.03 billion in 2023, N157.59 billion in 2024, and N189.11 billion in 2025, from the EMT levy. New Telegraph reports that early last month, Fintech companies such as OPay, Moniepoint, Palmpay and Paga, started notifying their customers that they would, from September 9, 2024, begin the deduction of the N50 EMTL from every inflow of N10,000 and above received by their customers.