By 2025, the federal government’s enlarged digital tax net is expected to bring in N230 billion, a 31.35 percent increase over the 2024 objective of N175 billion, according to the 2025–2027 Medium Term Fiscal Framework and Fiscal Strategy Page.
This money will come from the Electronic Money Transfer Levy (EMTL), which was added to the Stamp Duty Act as an amendment to the Finance Act 2020. The levy charges a fee of N50 for electronic receipts or transfers of N10,000 or more made through banks and financial institutions.
By extending EMTL to fintech companies like Moniepoint, Opay, and Palmpay in September 2024, the federal government could access a market that handled N46.91 trillion transactions in 2023. December 2024 marked the start of the implementation of the new levy.
Targeting the growth of electronic transfers, the EMTL brought in N180.31 billion for the federal government in 2023, a 29.45% increase over its initial objective of N136.35 billion. In August 2024, the total EMTL was N133.22 billion, on track to reach its N175 billion goal.
Each of the three levels of government receives a portion of the EMTL revenue. EMTL collections have benefited from the rise in cashless transactions brought about by the wider use of digital financial services.
Cashless transactions increased from N395.38 trillion in 2022 to over N600 trillion in 2023. By July 2024, they had already reached N572 trillion.
Instant transfers and mobile money platforms have fuelled a large portion of these transactions. According to data from the Nigeria Inter-Bank Settlement Systems (NIBSS), mobile money transactions have nearly tripled over the last five years, from N1.37 trillion between January and July 2020 to N41.54 trillion in the same period of 2024.
With a combined user base of 65 million, Opay and Palmpay are the industry leaders in this field. Operating under a microfinance banking license, Moniepoint is a significant digital bank that serves over 10 million clients and handles over $17 billion in monthly transactions.
The government hopes that by extending EMTL to these fintech platforms, yearly revenue from the levy will reach N305 billion by 2027, a 74.18 percent increase from the N175.11 billion estimate for 2024.
To compensate for the EMTL expenses, Point of Sale (PoS) operators that use platforms such as Moniepoint, Opay, and Palmpay have started increasing fees.
“My PoS operator charged me N300 for withdrawing N10,000, up from N200. I paid, but I doubt I’ll use him again,” complained Florence Benjamin.
Additionally, irate consumers have expressed their displeasure on X. Seige (@OjoPraise), “My issue with the POS money vendors is they will add more charges when you want to transact anything because of this levy. Imagine you want to withdraw N1,000, and they say 200 per N1,000. After all, nobody is going to protest or do anything. We are broken!”
Although the increased EMTL will result in more transactions being subject to taxes, industry observers caution that this could lessen the allure of neo banks, which benefited from low or no transfer fees. Customers may incur additional expenses, particularly those relying on PoS operators for transactions.
