The Electronic Money Transfer Levy (EMTL) revenue component of disbursements by the Federation Account Allocation Committee (FAAC) to the three tiers of government-Federal Government, states and local government councils (LGCs) in the first nine months of this year, amounted to N148.61 billion, findings by New Telegraph show.
The amount is N13.41 billion or 9.92 per cent higher than the N135.20 billion that the FAAC disbursed as EMTL revenue 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 nine months of the year, indicates that the EMTL revenue disbursed to the three tiers of government amounted to N15.92 billion in January 2024; 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, N15.02 billion in August and N19.21 billion in September.
Introduced by the Federal Government in the Finance Act, 2020 to generate more revenue for its activities by tapping into the growth in electronic funds transfer in the country, the EMTL 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 per cent to the state governments and 35 per cent to the 774 local governments.
For instance, the press release issued by the Director, Information and Public Relations at the Federal Ministry of Finance, Mohammed Manga, at the end of the October meeting of the FAAC, last week, said:
“The sum of N19.213 billion from Electronic Money Transfer Levy (EMTL) was distributed to the three tiers of government as follows: the Federal Government received N2.767 billion, States got N9.222 billion, Local Government Councils received N6.456 billion, while N0.768 billion was allocated for Cost of Collection.”
According to the statement, at the October meeting, the FAAC shared a total sum of N1.298 trillion to the three tiers of government as Fed – eration Allocation for the month of September, 2024 from a gross total of N2.298 trillion.
“From the stated amount inclusive of Gross Statutory Revenue, Value Added Tax (VAT), Electronic Money Transfer Levy (EMTL), Exchange Difference (ED and Augmentation of N150.000 billion, the Federal Government received N424.867 billion, the States received N453.724 billion, the Local Government Councils got N329.864 billion, while the Oil Producing States received N90.415 billion as Derivation, (13% of Mineral Revenue).
“The sum of N80.993 billion was given for the cost of collection, while N878.946 billion was allocated for Transfers Intervention and Refunds,” the statement added.
Further analysis of data obtained from the NBS shows that the amount generated from EMTL as revenue has risen steadily annually since the levy was introduced.
Specifically, 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.
Given that N148.61 billion was generated as EMTL revenue between January and September, it means that the country is set to exceed its revenue projection (N157.59 billion) from the levy this year.
Indeed, early in September, 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.
The fintech companies said the move was in compliance with FIRS regulations. In the notification to its customers, for instance, OPay said: “Please be informed that starting September 9, 2024, a one-time fee 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 to the Federal Government.” Analysts expect increased adoption of e-payment in the country to lead to the FIRS generating more EMTL revenue in the coming years.