In a recent turn of events, the Federal Government has mandated Nigerian banks, including Access, GTB, UBA, Zenith, and others, to commence the debit of account holders’ account for stamp duty due. As the news broke out, it sparked varied reactions among the banking public. Let’s delve into the details, shall we?
In response to a mandate from the federal government, Nigerian banks are required to debit customers’ accounts for certain past foreign currency transactions
This money will be sent to the government
The major commercial banks, including Access Bank, GTB, UBA, and Zenith, have alerted their customers to anticipate these deductions
Our sources confirm that the banks are planning to carry out these deductions which are due to a directive they received from the government.
The deductions pertain to the Electronic Money Transfer Levy (EMTL) that was accrued from previous foreign currency transactions spanning the years 2021 to 2023.
In a message sent to customers, the banks noted that this levy is in line with the Federal Inland Revenue Service (FIRS) directive.
Why the deductions on customers’ bank accounts
In late 2023, the Federal Inland Revenue Service (FIRS) directed all commercial banks to apply a N50 levy to every N10,000 electronic money transfer involving foreign currency, as decreed. This was a result of the enactment of the Finance Act 2020 Section 48 and Stamp Act 2004 Section 89A (1), which called for an Electronic Money Transfer Levy (EMTL) on any electronic transactions of N10,000 or more into any kind of account within a deposit money bank or financial institution.
However, despite the FIRS mandate, many of these banks have failed to make the required deductions for the past two years. This inaction has led to a significant amount of debt to the federal government.
Banks notice to customers
Consequently, some banks have issued a notice to their customers on the immediate dedication of the levy.
In a notice titled ‘Important Notice: Electronic Money Transfer Levy Deductions Begin on Foreign Currency Transactions,’ First Bank of Nigeria announced that deductions would start promptly and be forwarded to the FIRS.
The bank said.
“In compliance with this directive, a deduction of Fifty naira (N50) only will be applied to every foreign currency (FCY) transaction with an equivalent amount of N10,000 and above.”
Union Bank also said it would begin to deduct the N50 electronic transfer levy for all international transactions from January 1, 2024.
Stanbic IBTC Bank, in March 2023, announced the dedication of N50 levy on electronic money transfers from Domiciliary accounts.
Also, Access Bank said:
“We write to inform you of the Federal Inland Revenue Service (FIRS) notice to all banks, in line with the Finance Act 2020 and Stamp Act 2004, to remit the Federal Government Electronic Money Transfer Levy from foreign currency (FCY) inflows.
“Previously, the Electronic Money Transfer Levy 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 of N10,000 and above, incurring a charge of N50 (FCY equivalent).