After Months of Delay, Nigeria’s N50 E-Levy on Fintech Platforms, Opay and Moniepoint Begins

The Federal Government of Nigeria has officially commenced the implementation of a N50 Electronic Money Transfer Levy (EMTL) on transactions exceeding N10,000 for users of fintech platforms such as Opay, Moniepoint, and Palmpay. This move marks the extension of the levy, which was previously applicable only to commercial banks, to fintech companies.

What is the EMTL?

The EMTL is a one-time charge of N50 applied to electronic money transfers above N10,000. Its introduction aims to generate additional revenue for the Federal Inland Revenue Service (FIRS). The levy does not benefit the fintech platforms themselves, as clarified in communications from Opay, Moniepoint, and Palmpay.

Moniepoint recently issued a statement explaining that it collects the levy on behalf of the FIRS, assuring users the deductions are strictly for government purposes.

Reactions from the Public

The policy has stirred mixed reactions across Nigeria:

• Students and Youths: Organizations like the National Association of Nigerian Students (NANS) have criticized the levy, arguing that it disproportionately burdens students, many of whom depend on financial transfers for essential expenses like tuition and daily living costs. NANS has called for a review of the policy, suggesting alternative revenue sources such as investments in agriculture and infrastructure.
  
• Consumers: Social media is abuzz with varied opinions. While some users express frustration over additional costs in an already challenging economy, others share workarounds, such as splitting large transfers into smaller transactions to avoid the levy.
  
• Fintech Advocates: Many fintech users, particularly small business operators, highlight the cumulative effect of the levy. POS operators, for example, complain about reduced margins, as they must now absorb or pass on extra charges to customers.

The EMTL is expected to impact key user groups:

• Students: With over 40 million Nigerian students relying on financial transfers for basic needs, the levy reduces available funds for education and living expenses.

• Small Business Owners: Many SMEs and POS operators are also affected, as they rely on fintech platforms for business transactions. Additional charges could erode their already slim profit margins.

Government Perspective

The Federal Government argues that the EMTL is crucial for boosting tax revenues. However, critics question its timing and effectiveness, especially when citizens face economic hardships and rising costs of living.

The Bigger Picture

The EMTL is part of a broader push to formalize Nigeria’s economy and improve tax compliance. However, concerns about accountability and the efficient use of tax revenues remain unresolved. Fintech companies are now in the challenging position of balancing compliance with retaining customer trust.

As the policy takes root, its long-term effects on Nigeria’s digital economy and financial inclusion efforts will be closely monitored.