Union Bank to begin deduction of N50 electronic transfer levy on foreign transactions

Union Bank says it will begin to deduct the sum of N50 for all international transactions as electronic transfer levy (ETML) from January 1, 2024.

In an email to customers seen by TheCable, the bank said the deduction would apply to all foreign currency transactions equivalent to or above N10,000.

In attempts to ramp up revenue generation, the federal government introduced the EMTL in the Finance Act of 2020, which amended the Stamp Duty Act, to tap into the growth of electronic funds transfer in the nation.

The EMTL is a single, one-off charge of N50 on electronic receipt or transfer of money deposited in any commercial money bank or financial institution on any type of account on sums of N10,000 and above.

Revenue derived from the EMTL is shared among the three tiers of government by the federal accounts allocation committee (FAAC).

Union Bank, in the email, said the transaction fee followed a directive by the Federal Inland Revenue Service (FIRS) to all deposit money banks.

“The Federal Inland Revenue Service has directed all Banks to deduct and remit Electronic Money Transfer Levies (EMTL) on all foreign currency transactions equal to and above an equivalent of N10,000.00, effective 1st January 2024,” the email reads.

“This aligns with the Finance Act 2020 Section 48 and Stamp Duty Act 2004 Section 89A (1), as amended.

“Similarly, all banks have been directed to deduct and remit the EMTL on all qualifying foreign transactions from the 1st of January 2021 (when the Finance Act became effective) to the 31st of December 2023.

“In line with this directive, we would like to inform you that we will start deducting fifty naira (N50.00) on all foreign transactions that meet this threshold, along with the existing levy on qualifying naira transactions. The deducted amount will be remitted to the relevant tax authorities.”

On March 8, 2023, Stanbic IBTC Bank announced the deduction of N50 as EMTL from domiciliary accounts.

The EMTL regulations were signed into law in December 2022 by Zainab Ahmed, former minister of finance, as a way of providing additional sources of revenue for the federal government.