Debit Alerts: The Legality of Electronic Money Transfer Levy by the Federal Government of Nigeria.
More than ever before, Nigerians are getting frustrated
with the incessant bank debit alerts, being sent by their banks on account of
one charge or levy. While these arbitrary deductions may sometimes go unnoticed
by wealth customers, majority of Nigerians are not only aware, but irritated by
it. However, considering the stress of going to the Bank to lodge complaints
and the petite sum involved, they are forced to bear this pathetic situation.
Essentially, Commercial banks are not charitable
organizations. They are established to make profits. As a business organization,
they make profits from charges levied on product and service rendered to their
customers. This may include a flat fee of N6.98
for the use of Unstructured Supplementary Service Data (USSD), a platform that
enables customer to carry out internet banking transactions. Similarly,
commercial banks equally charge customers with ATM card, a quarterly card
maintenance fee of N50, and a host
other charges as prescribed by the Central Bank of Nigeria.
While some charges are well known and accepted, the legality
of others, such as the Electronic Money Transfer (EMT) Levy, has been
questioned. It seems that the tax authorities have been engrossed with battling each other in determining the appropriate authority to collect the levy, that they forgot to provide
proper enlightenment to members of the public about the source, essence and
nature of the levy.
This explain
why many are confused about the regular deductions from their accounts after
each transaction. Thus, exposing the Banks to undue accusations. It is
important to note that the levy in question is a tax imposed by the Federal Government of Nigeria and administered by the Federal Inland Revenue Service (FIRS), which
replaced the controversial stamp duties charges on electronic bank transfer. In
other words, the Banks in this arrangement are not beneficiary of the levy but
are acting as agents for the tax authority because they are obliged by law to
deduct and remit the levies.
What is Electronic Money Transfer Levy
Pursuant to section 89A of the Stamp Duties Act, Cap
S8, Laws of the Federation of Nigeria, 2004, as amended by the Finance Act,
2021, (hereinafter referred to as “the Act”). Electronic Money Transfer (EMT) Levy
is defined as a charge imposed on electronic transfer of money on any kind of
account in the sum of N10,000 or above.
The levy is a singular one-off charge of N50
on money transfer through any electronic channel in the sum of N10,000 or more. Subsection (3) of the Act empowers the
Minister of Finance to make Regulations for the imposition, collection and
remittance of the said levy. Consequently,
in exercise of this power, the Honourable Minister of Finance, Budget and
National Planning, Zainab Shamsuna Ahmed (Mrs.), on the 15th day of
June 2022, made Regulations for the effective and efficient implementation of
the Levy.
The Levy is meant to be shared between the Federal and
State Governments as a way of shoring up revenue to augment the dwindling oil
revenue in the Country. The collection is distributed on the basis of
derivation, 15% to the Federal Government and Federal Capital Territory, Abuja
on one hand and 85% to the State Government.
Who Bears the Burden of the Levy?
A close scrutiny of the Electronic Money Transfer Levy Regulation would reveal that the levy is charged on the account receiving the money
transfer. For instance, if Promise transfers the sum of N15,000 (Fifteen Thousand naira) to Adura, it is the account of the
latter that would be charged N50.
From the foregoing, it settled that EMT levy deducted
by commercial banks is legal as it is predicated on the Stamp Duties Act, as
well as the ensuing Regulations. However, Nigerians should note that the
approve charge is N50. Anything above
this, is illegal and formal complaint should be lodge with the bank for
reversal. On the other hand, the Banks are enjoined to keep records and books
of all electronic money transfers on which levy was collected, including
records of cancelled or reversed transactions for a period not less than 7
years.
Specimen of EMT Levy Bank Notification
Amount: NGN50.00
Acc: ***********
Desc: ***********/FGN ELECTRONIC TRANSFER LEVY
Time: 10/02/2023
Avail Bal: NGN**************
Total: NGN****************
Sender: Access Bank
This article is intended to provide general information on the subject
matter. Professional advice should be sought about special circumstances. For more information on
the subject matter, you may contact the undernamed solicitor.
Nosakhare Okuonghae
nosakhareokuonsofficial@gmail.com
+234-9156497843
EMT levy is not a bank levy but government levy on bank customers.
ReplyDeleteHonestly, their charges irritates me
ReplyDeleteVery true. Today someone informed me that he had to close one of his accounts because of multiple charges.
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