On Monday, businesses that operate Point-of-Sale (POS) terminals began charging their customers more money due to a new government rule. This rule, called the Electronic Money Transfer Levy, requires a fee of 50 Naira (about 13 cents) to be paid on any electronic money transfer that is 10,000 Naira (about $13) or more. This fee is collected by the Federal Inland Revenue Service (FIRS), which is the government agency responsible for tax collection.
Many financial technology (fintech) companies, which provide online banking and money transfer services, informed their customers over the weekend that they would start collecting this 50 Naira fee. This is part of a law called the Federal Government Stamp Duty Act, and the money collected will be sent directly to the FIRS.
For example, a company called Moniepoint sent an email to its users explaining that when they receive more than 10,000 Naira into their Moniepoint accounts, they will be charged this 50 Naira fee. Moniepoint made it clear that they do not keep this money; instead, they are simply collecting it on behalf of the government.
The same goes for another fintech company, PalmPay, which also announced that starting on November 30, 2024, it would charge the 50 Naira fee for any transfers of 10,000 Naira or more. PalmPay reassured its customers that it does not benefit from this fee and that it is committed to providing affordable financial services.
The Electronic Money Transfer Levy was first introduced in the Finance Act of 2020. This law expanded the types of transactions that could be taxed to include electronic money transfers. The new rules specify that whenever someone receives an electronic transfer of 10,000 Naira or more, they must pay a one-time fee of 50 Naira.
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However, not everyone is happy about this new charge. Some POS operators, like Kazeem Adewale from Ogun State, expressed frustration. He mentioned that he has been explaining the reason for the increased charges to his customers, who often think he is trying to cheat them. He said it is exhausting to deal with unhappy customers, but he and other operators have no choice but to raise their fees because of this new levy.
Another POS operator, Mrs. Helen Faniran, mentioned that she hasn’t started charging the new fee yet but has heard from her colleagues that they plan to increase their fees. She explained that cash is hard to come by, and as a result, they have to buy cash from market vendors, which has raised their costs. Therefore, they have to increase the fees they charge for transactions.
Customers are also feeling the impact of these changes. For instance, one customer, Deborah Attah, reported that she was charged 600 Naira for a transaction of 20,000 Naira, which used to cost her 400 Naira. Many customers took to social media to express their dissatisfaction with the new Electronic Money Transfer Levy, calling it an unfair tax. Some users argued that this fee feels like a punishment for choosing digital transactions instead of cash.
The initial rollout of this levy in September faced backlash from the public, leading to its suspension. It was later rescheduled to start on December 1st. Economists have expressed concerns that this new tax could negatively affect the growing fintech industry, suggesting that it might discourage people from using digital money services. They argue that the government’s attempt to increase revenue through this levy could backfire, potentially harming the economy rather than helping it.
