Emtl: Fg, States, Lgs’ Earnings Decrease By 0.9% To N94.78Bn.

The revenue generated from the Electronic Money Transfer Levy (EMTL) and disbursed by the Federation Account Allocation Committee (FAAC) to the three tiers of government in the first half of 2024 totaled N94.78 billion, according to findings by New Telegraph.

This amount is N910 million or 0.95% lower than the N95.69 billion generated from EMTL by the Federal Inland Revenue Service (FIRS) during the same period in 2023.

An analysis of the communiqus of the FAAC meetings and relevant data from the National Bureau of Statistics (NBS) for the first half of the year reveals that the EMTL revenue disbursed to the three tiers of government was as follows: 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, and N15.78 billion in June.

This means that the FIRS generated a total of N94.78 billion in EMTL revenue between January and June 2024. The EMTL is a one-off levy of N50 on the recipient of any electronic receipts or transfers of N10,000 or above, introduced by the Federal Government in the Finance Act of 2020 to tap into the growth in electronic funds transfer in Nigeria.

The levy also applies to equivalent receipts or transfers carried out in other currencies, with the levy charged at the exchange rates determined by the Central Bank of Nigeria (CBN). It came into effect in January 2021 and is an amendment of the Stamp Duty Act, which used to levy N50 on electronic payments above N1,000.

According to the Finance Act 2020, the revenue derived from the EMT levy is shared based on derivation and distributed at 15% to the Federal Government and Federal Capital Territory, 50% to the state governments, and 35% to the 774 local governments.

In the FAAC disbursement report for June 2024 released by the NBS, it is stated that the FAAC disbursed a total of N2.32 trillion to the three tiers of government in June 2024 from the revenue generated in May 2024. This amount includes N1,223.89 billion from the Statutory Account, N587.46 billion from Exchange Gain, N15.78 billion from EMTL, and N497.66 billion from Value Added Tax (VAT).

The Federal Government received a total of N365.81 billion from the N2.32 trillion, while the States and Local Governments received N388.42 billion and N282.48 billion, respectively.

Although the revenue generated from EMTL in the first half of 2024 was lower compared to the corresponding period in 2023, analysts expect that the increasing adoption of e-payment in the country will lead to higher EMTL revenue generated by the FIRS in the coming years.

Data from the NBS shows that the EMTL revenue generated by the FIRS increased from N114 billion in 2021 to N125.67 billion and N181.17 billion in 2022 and 2023, respectively.

In the 2023-2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, the Budget Office of the Federation projected that Nigeria would generate 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 at the end of last year, Deposit Money Banks (DMBs) in the country started informing their customers via emails that they would begin implementing EMTL deductions on all foreign currency transactions, following the directive of the FIRS.

Some of the emails stated that the deductions would begin from January 2, 2024. One of the Tier 1 banks’ emails to its customers read: Previously, the Electronic Money Transfer Levy (EMTL) was only applicable to accounts receiving electronic deposits of N10,000 and above, or its equivalent.

However, starting January 2, 2024, the deduction will be extended to foreign currency inflows equivalent to N10,000 and above, incurring a charge of N50 (foreign currency equivalent).

In compliance with this notice, outstanding electronic money transfer levy on foreign currency inflows from January 2021 to December 2023 are also to be deducted by January 31, 2024.