Deposit money banks (DMBs) are actively informing their customers about the recent directive from the Federal Inland Revenue Service (FIRS). The directive instructs banks to deduct the backlog of the Electronic Money Transfer Levy (EMTL) on past foreign currency transactions by January 31, 2024.
This directive covers transactions made between 2021 and 2023. In the previous month, the FIRS directed deposit banks to deduct and remit the EMTL on future foreign currency transactions. According to the tax body, this levy is aligned with the Finance Act 2020 and Stamp Act 2004, focusing on the transfer of money to any financial institution on any type of account.
Under EMTL regulations, a one-time levy of ₦50 is applicable to the recipient of electronic receipts or transfers amounting to ₦10,000 or more. For equivalent transactions in other currencies, the levy will be determined by the exchange rates set by the Central Bank of Nigeria (CBN).
The regulations mandate the receiving bank to collect and remit the levy to the FIRS by the next working day after the transaction date or on a date specified by the FIRS. Furthermore, if the receiver is a walk-in customer without a bank account, the receiving bank is required to deduct the levy from the payable amount.
Indeed, in the notice sent by Access Bank to customers, titled ‘Important Notice’, it said: “We write to inform you of FIRS notice to all banks, in line with the Finance Act 2020 and Stamp Act 2004, to remit the EMTL from foreign currency (FCY) inflows.
“Previously, the EMTL was solely applicable to accounts receiving electronic deposits of N10,000 and above or its equivalent. However, starting January 2, 2024, the deduction will be extended to FCY inflows equivalent to N10,000 and above, incurring a charge of N50 (FCY equivalent).
“In compliance with this notice, outstanding EMTL on FCY inflows from January 2021 to December 2023 are also to be deducted by January 31, 2024. We appreciate your understanding and thank you for trusting Access Bank.”