The Federal Inland Revenue Service (FIRS) has instructed banks to commence the deduction of a N50 Electronic Money Transfer Levy (EMTL) on foreign currency (FCY) transactions. The EMTL is a one-off charge on electronic receipt or transfer of money deposited in any commercial money bank or financial institution for sums of N10,000 and above. The directive is in line with section 48 of the Finance Act of 2020 and section 89a (1) of the Stamp Duty Act of 2004.
Revenue generated from the EMTL is shared among the three tiers of government through the federation account allocation committee (FAAC). Financial institutions are required to apply the deductions on foreign currency transactions executed from January 1, 2021, to December 2023.
Banks, including Access Bank, Polaris Bank, and First Bank, have informed their customers about the commencement of EMTL deductions on FCY transactions. Access Bank stated that the deduction would apply to FCY inflows equivalent to N10,000 and above, with compliance starting from January 31, 2024. Polaris Bank and First Bank also announced compliance with the FIRS directive, with deductions starting from January 2, 2024.
The FIRS emphasized that the EMTL is part of efforts to streamline and widen the tax net, supporting the government’s revenue goals. The move aligns with the push for a centralized revenue collection system, with the FIRS playing a leading role in achieving the government’s economic objectives.
