In the first half of 2023, the Nigerian government’s electronic transfer levies generated an impressive N80.86bn for the three tiers of government, according to data obtained from the Federation Account Allocation Committee communique covering January to June 2023. The surge in electronic transfers in the country contributed significantly to this remarkable revenue figure.
The electronic money transfer levy was introduced as a source of government revenue through the Finance Act 2020, which amended the Stamp Duty Act to capitalize on the growth of electronic funds transfer in Nigeria.
The EMT levy is a one-off charge of N50 imposed on electronic receipt or transfer of money deposited in any deposit money bank or financial institution for any type of account with sums of N10,000 or more.
Since its implementation, the EMT levy has proven to be a consistent source of income for the three tiers of government. The government earned N13.8bn from electronic money transfer levies in January, N11.65bn in February, N14.49bn in March, N15.12bn in April 2023, N14.37bn in May, and N11.44bn in June.
Furthermore, the government is on track to surpass its N137.03bn projection for EMT levies in 2023. As outlined in the 2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper by the Budget Office of the Federation, the projected revenues from the Main Pool, VAT Pool, and Electronic Money Transfer Levy are N4.89tn, N2.74tn, and N136.35bn, respectively.
In 2021, the government earned N111.84bn from EMT levies, and the exponential growth of e-payment transactions since the onset of the COVID-19 pandemic in 2020 has further contributed to the rise in revenue. Data from the Nigeria Inter-Bank Settlement System portal shows that the total value of electronic transactions increased from N108.42tn in 2019 to N162.89tn in 2020 and significantly surged to N278.38tn in 2021. By 2022, cashless transactions reached an impressive N395.47tn.
The International Monetary Fund recently highlighted that the value of mobile money transactions in Nigeria accounted for 9.72% of the Gross Domestic Product in 2020, primarily due to the COVID-19 pandemic’s impact.
Victor Olojo, the National President of the Association of Mobile Money Agents in Nigeria, expressed confidence that the EMT levy would continue to grow in the foreseeable future.
The government’s proactive approach in tapping into the thriving electronic funds transfer landscape has resulted in substantial revenue gains, further driving Nigeria’s economic growth and development.