According to the World Bank, Nigeria is expected to earn N462 billion this year from the electronic money transfer (EMT) charge, which will serve as a steady source of revenue.
The EMT levy was implemented in the Finance Act 2020, which revised the Stamp Duty Act and taps into the rise in electronic funds transfer in Nigeria, according to the bank’s research, titled “Resilience through Reforms.”
The EMT levy, sometimes known as Stamp Duty, is a one-time tax of N50 on any electronic receipt or transfer of money put in any deposit money bank or financial institution on any type of account with a balance of N10,000 or more.
The EMT levy money is distributed according on derivation, with 15% going to the federal government and the Federal Capital Territory, and 85% going to state governments.
Taiwo Oyedele, PwC’s Fiscal Policy Partner and Africa Tax Leader, said the levy is outdated and shouldn’t be used anymore.
“Think back to the stamp duty law of 1939 or thereabouts, long before our independence, and there hasn’t been much improvement apart from the conversion of pounds to naira and kobo.
“We have a law from 1939, which was passed before I was born, so it is very old, and it means we are attempting to tax transactions that did not exist at the time.
“We didn’t even have the internet back then, and now we’re attempting to impose stamp duties on money transfers,” says the author. We’re trying to fit a square peg into a round hole since electronic money transmission didn’t exist when this law was enacted. “There would be numerous scars,” Oyedele predicted.