The Electronic Money Transfer Levy – A Brewing Storm

Background

The introduction of the electronic money transfer levy ("EMT levy" or "the levy") through the Finance Act, 2020 (the Act) has replaced the previous stamp duty on electronic receipts or electronic transfers. Prior to the enactment of the Finance Act, 2019, the Central Bank of Nigeria (CBN) issued a Circular to Deposit Money Banks (DMBs) and other financial institutions which mandated the deduction of N50 stamp duty on electronic transfers and receipts from N1000 and above. The duty was to be borne by receiving bank accounts and remitted to the CBN. Transfers between accounts owned by the same person and transfers from savings accounts were exempted from the duty.

Subsequently, the Finance Act 2019 introduced the legal framework for the imposition of this stamp duty through an amendment to section 89(3) of the Stamp Duties Act (SDA).  However, the threshold for eligible transactions was increased to N10,000 and above and the exemption for savings account