Nigeria: Electronic money transfer levy regulations

Guidance for imposition, administration, collection and remittance of electronic money transfer levy

Guidance for electronic money transfer levy regulations

The Minister of Finance, Budget and National Planning signed the electronic money transfer levy regulations, 2022.

  • The regulations, which were issued to provide guidance for the imposition, administration, collection and remittance of the electronic money transfer levy introduced by the Finance Act, 2020:
  • Provide for a singular and one-off levy of ₦50 on the recipient of any electronic receipts or transfers of ₦10,000 or above. For equivalent receipts or transfers carried out in other currencies, the levy will be charged at the exchange rates determined by the Central Bank of Nigeria (CBN).
  • Appoint the Federal Inland Revenue Service (FIRS) as the administrator of the levy with the responsibility to assess, collect and give an account of the levy.
  • Mandate the receiving bank to collect and remit the levy to the FIRS by the next working day after the transaction date or on such other date as prescribed by the FIRS. In addition, the receiving bank is required to deduct the levy from the amount payable when the receiver is a walk-in customer that does not have an account with the bank.
  • Mandate all banks to prepare a daily list of cancelled or reversed transactions, outlining the names of the transferee, transaction amounts, levies deducted thereon, and the amount reversed and/ or cancelled. Further, banks are required to deduct the levies collected on reversed and/ or cancelled transactions from levies collected on the following working day and return such levies to affected customers.
  • Require banks to prepare and render to the FIRS periodic returns of the levies collected and remitted on electronic receipts and/ or transfers of money. The returns, which will be submitted no later than 21 days after the end of each month in a medium or format approved by the FIRS, must include the list of reversals and/ or cancellations for the relevant month.
  • Require banks to keep records of all electronic transfers on which the levies are collected for a minimum of seven years.
  • Provide that any bank, which fails to collect the levy, will be liable to a penalty of 150% of the levy not collected. When the bank collects the levy but fails to remit same to the FIRS, the bank will be liable to pay the levy plus a penalty of 50% and interest at the CBN monetary policy rate. When a bank fails to render returns of the levies collected or reversed transactions, or renders incomplete or inaccurate returns to the FIRS, it will be liable to a penalty of 10% of the value of the returns not rendered or incorrectly rendered.
  • Define banks as “a deposit money bank or financial institution referred to under Section 89A of the SDA and includes all banks and other financial institutions as defined under the Banks and Other Financial Institutions Act, 2020.”

KPMG observation

The requirement for the FIRS to deploy technology for the collection of the levy will help to reduce collection cost and provide reasonable assurance on the correctness of the amounts due. Most importantly, the levy will be collected in real time to minimize the incidence of tax debt that normally arises when there is a long timing difference between the collection of tax and the taxable event giving rise to the tax or levy. 

However, as observed with recent regulations issued by the Minister, some provisions of the regulations may require revisions to provide consistency with the existing laws and avoid unnecessary disputes with the stakeholders.

Read a December 2022 report prepared by the KPMG member firm in Nigeria


The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 3712, 1801 K Street NW, Washington, DC 20006.