Between January and August 2024, Nigerian bank customers paid N133.89 billion in Electronic Money Transfer Levy (EMTL), underlining the government’s push to expand the tax bracket amid dwindling oil earnings.
The figure, revealed in the 2025-2027 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), represents 76% of the N175.11 billion target set for EMTL in the 2024 budget.
The EMTL, introduced under the Finance Act 2020, imposes an N50 charge on every electronic transfer or receipt of N10,000 and above, with deductions carried out by banks on behalf of the government. This measure is part of the government’s broader strategy to expand the tax net and increase internally generated revenue as oil revenues—the traditional backbone of Nigeria’s economy—continue to decline due to theft, and production shortfalls.
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As part of efforts to enhance revenue from the EMTL, the government expanded its application in 2024 to include transactions processed by financial technology platforms. In September, major fintech companies such as OPay, Moniepoint, and PalmPay notified their customers of the planned levy implementation, which was later enforced on December 1, 2024.
This extension marks a significant shift, as fintech platforms previously offered free or low-cost transaction services, a feature that made them attractive alternatives to traditional banks. With the EMTL now uniformly applied across all financial service providers, including fintech platforms, the government has effectively eliminated the disparity between the two sectors, ensuring broader compliance and collection.
Impact on Revenue and Customers
The extension of the EMTL to fintech platforms is expected to boost collections significantly in the coming year, with the government projecting N228.85 billion in revenue for 2025. This represents a 31% increase over the 2024 target, highlighting the importance of the levy in bridging the country’s revenue gap.
For customers, the uniform implementation of the EMTL has ended the era of free banking services offered by FinTech platforms. While these platforms were previously celebrated for their affordability, the mandatory N50 deduction now aligns them with traditional banking practices, adding to the financial burden on Nigerians, particularly in a challenging economic climate.
The Federal Inland Revenue Service (FIRS) has also broadened the EMTL’s scope by including foreign currency transactions. Initially applicable only to local currency transactions, the levy now covers all electronic transfers in foreign currencies. Banks began applying this directive retroactively in January 2024, deducting the N50 charge on foreign currency transactions conducted between 2021 and 2023.
This development reflects the government’s determination to maximize revenue from all possible avenues, particularly as electronic transactions continue to grow in volume and value.
Revenue derived from the EMTL is shared among the three tiers of government, with the federal government receiving 15%, state governments 50%, and local governments 35%. This distribution model aims to ensure that the benefits of the levy are felt across the country, addressing the fiscal needs of different levels of governance.
However, while the EMTL forms part of a broader strategy by the federal government to diversify its revenue streams, the levy raises questions about the impact on financial inclusion and the cost of banking services, especially for low-income earners.
Many are concerned that while the levy provides a crucial source of income, its growing scope and application may further strain citizens already grappling with economic hardship.