Operators of Point-of-Sale (PoS) terminals raised their charges on Monday in line with the implementation of the Electronic Money Transfer Levy of N50 by the Federal Inland Revenue Services (FIRS) charged on any electronic inflow of N10,000 and above.
Several fintech platforms on Sunday notified their customers that they would start the collection of N50 as an Electronic Money Transfer Levy in compliance with the Federal Government Stamp Duty Act, which would be remitted to Federal Inland Revenue Services.
Moniepoint in a mail said, “Please be informed that in compliance with the Federal Government Stamp Duty Act, you would be charged an Electronic Money Transfer Levy of N50 by the Federal Inland Revenue Services on any electronic inflow of N10,000 and above” adding that “FIRS charges you N50 for inflow received in your Moniepoint personal banking account. Moniepoint does not benefit from this but receives and remits this sum to FIRS.”
It clarified that the levy applies to all electronic inflows of N10,000 or more except when the electronic inflow is between Moniepoint accounts owned by the same user.
The Electronic Money Transfer Levy is an N50 charge on mobile money, internet banking and other electronic inflows of N10,000 or more.
PalmPay told its “Dear Valued Customer, In accordance with the Electronic Money Transfer Levy regulation of 2022, a N50 levy will be charged on transfers of N10,000 or more paid into your PalmPay account from November 30th, 2024 as mandated by the Federal Inland Revenue.
“Please note that PalmPay does not benefit from this levy, it is remitted directly to the federal government. PalmPay continues to offer unlimited free transfers to any bank account. We are dedicated to providing affordable and accessible financial services to our valued customers.”
OPay sent a terse message to its customers on the app saying, “Dear customer, in line with the FIRS, the EMTL applies starting December 1st, 2024.”
The Electronic Money Transfer Levy was first introduced through the Finance Act 2020, which expanded the scope of dutiable instruments under the Stamp Duties Act to include electronic transactions.
The regulations guide the imposition, administration, collection, and remittance of the Electronic Money Transfer Levy which was introduced by the Finance Act, 2020. Key provisions include A one-time levy of N50 on the recipient of any electronic receipts or transfers of N10,000 or more.
A POS operator in the Arepo area of Ogun State, Kazeem Adewale, lamented in Yoruba that he had been explaining to customers the reason for the hike in charges since yesterday and was barely coping with annoyed customers.
“I have been explaining and it is tiring. Customers think you want to cheat them but all of us here have had to increase our charges because of this new levy,” he groaned.
A POS operator in Yaba in Ondo town, Mrs Helen Faniran, said, “I haven’t started collecting the charge but I have heard a few of my colleagues saying they would start. One of them said instead of charging N300 for N10,000, she was going to start charging N400.”
Asked why they were charging N300 for N10,000 in the first place, Faniran said “Cash is scarce here. Since morning I have not been able to do any business.”
Asked how she sources her cash, she said, “We buy cash from market women and anyone ready to give us. Before the market women used to give us for free but now they sell to us. That has impacted our profit margin. Ordinarily, it would collect N200 for N10,000 but since we are buying and you have to go through a lot of stress to get your cash, you have to add N100 to it. The market women will give you N100,000 for N2,000 and we will do the same amount for N3,000.”
A POS operator at the Agege area of Lagos State said the charges commence tomorrow(Tuesday). In the Ikotun area of Lagos, a customer said that there had been no increase in charges as of Monday.
Another customer, Deborah Attah, said, “They charged me N600 for N20k when it used to be N400. N5,000 is now N150 and N10,000 is N300.”
On social media, bank customers also lamented the hike in POS charges.
A user of the social media platform, X, Sam Addai, lamented, “E levy is one of the most obnoxious taxes. How are we being ‘punished’ for choosing digital money transfers over cash transactions?”
Another X user, 6xstem, said, “Electronic Transfer levy is criminal! Electronic Transfer levy is robbery in broad daylight. Stealing from the citizens indirectly is insane!”
Another X user identified as Seige, tweeting as #OjoPraise), said, “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 will say 200 per N1,000. After all, nobody is going to protest or do anything. We are broken!”
Adding a crying emoji to his comments, @chxbueze said, “Government go collect charges, POS too go collect.”
Muritala Mujeed said, “Ohhhh This is the reason why POS users started N100 extra charges on transactions above N10,000. I wanted to pay for fuel this morning and I was shocked by the guy’s ‘shalaye’ (explanation). Toor, it is well o.”
Collins said, “I deposited N12,000 from POS to my account, they still charged me N50 and I paid POS charges. Please what’s going on?”
The initial implementation of the levy in September elicited reactions from Nigerians especially on social media who accused the government of continuously imposing taxes on citizens without notable progress or accountability for how the monies are spent. It was suspended and implementation was moved to December 1st.
As of the time of the initial implementation, economists had warned that the move would ground the fintech space.
Former Chief Economist at Zenith Bank, Marcel Okeke, opined that the move was ill-timed and could have far-reaching negative consequences for the economy, particularly in the fintech sector, which has been growing rapidly in recent years.
Okeke argued, “The Federal Government’s move to impose a N50 levy on fintech transactions is driven by a desire to boost revenue. However, this approach may have unforeseen consequences. By targeting digital transactions, the government may inadvertently discourage people from using these services, leading to a demonetisation of the economy,” Okeke said.
Another economist, Alias Aliyu, described the government’s action as a “desperate move” to increase revenue, arguing that the current economic conditions do not justify such a measure. – Punch.
