Fintech boosts FG’s EMTL revenue to N31.2 billion in December 2024
Joy Agwunobi
The federal government recorded a boost in revenue from the Electronic Money Transfer Levy (EMTL) in December 2024, achieving a historic monthly collection of N31.2 billion,marking the highest revenue recorded in a single month since the levy’s inception.
The remarkable increase followed the extension of the levy to transactions carried out on fintech platforms such as PalmPay, OPay, and Moniepoint, which began deducting the fee from December 1, 2024.
According to data released by the Federation Account Allocation Committee (FAAC) for December, this represented a 107 per cent surge compared to the N15.046 billion collected in November 2024. The December revenue contributed significantly to the total shared among the three tiers of government, which amounted to N1.424 trillion. These funds were drawn from statutory revenue, Value Added Tax (VAT), and EMTL collections for the month.
For years, fintech platforms like PalmPay and Moniepoint gained popularity for offering customers seamless, low-cost, or entirely free financial services. However, the introduction of the EMTL brought an end to this era.
The levy imposes a one-time charge of N50 on all electronic money transfers or receipts of N10,000 and above, excluding transfers made between accounts owned by the same individual or deposits into one’s own account.
Fintech companies promptly notified their users about the new charges. In a statement to its customers, Moniepoint explained: “Dear customer, you will be charged stamp duty of N50 on inflows of N10,000 and above. Moniepoint collects and remits this on behalf of the FIRS.” Similarly, OPay issued a notification across its app, stating: “Dear Customer, in line with the FIRS, the EMTL applies starting from December 1st, 2024.”
The levy, which was initially exclusive to transactions conducted through commercial banks, was extended to fintech operators as part of the government’s efforts to broaden its revenue base. The Federal Inland Revenue Service (FIRS) had earlier announced plans to begin the extended application on September 9, 2024. However, enforcement began in December, with fintech platforms fully integrating the deductions into their systems.
The Electronic Money Transfer Levy, introduced through the Finance Act 2020, is aimed at encouraging the adoption of electronic transactions while generating additional revenue for the government. By law, the revenue from the levy is distributed among the Federal, State, and Local Governments based on a derivation formula: state governments receive 50 per cent, local governments receive 35 per cent, and the Federal Government receives the remaining 15 per cent.
This distribution ensures that all levels of government benefit from the levy, which has become a critical tool for revenue generation in a country where traditional tax compliance rates remain low.
The December 2024 surge in EMTL revenue highlights the significant contribution of fintech platforms to Nigeria’s digital economy and the growing reliance on electronic payment systems by individuals and businesses alike.
However, when the levy to fintech platforms was implemented, it sparked mixed reactions among users, many of whom had become accustomed to free or heavily subsidised financial services. While some users expressed dissatisfaction with the additional charges, others recognised the need for the levy as a means of strengthening the nation’s fiscal framework.
In December 2023, the FIRS further extended the EMTL to cover foreign currency (FCY) transactions, mandating that banks deduct and remit the levy on all eligible transactions. This adjustment brought foreign currency transfers into compliance with existing regulations, which previously applied only to local currency transactions.
As part of this directive, banks began deducting the N50 levy on historical foreign currency transactions dating back to 2021, ensuring full compliance with the FIRS guidelines.
By extending the levy to fintech platforms, the government successfully accessed a rapidly expanding segment of the economy. These platforms, with their extensive user base, handle millions of transactions daily, making them a vital contributor to revenue generation efforts.