The Minister of Finance, Budget, and National Planning has issued a new Electronic Money Transfer Levy (EMTL) regulation focused on domiciliary accounts. As per regulation, the EMTL fee will be applicable on the transfer of funds into domiciliary accounts in a foreign currency that is equivalent to NGN 50.

The new tax is completed by banks and financial institutions on behalf of the government, and it aims to take immediate effect according to the press release.   Following the announcement, banks have communicated to their clients and customers that the fee will apply to domiciliary accounts on the directive of the Minister of Finance, Budget, and National Planning. A dollar or pound account holder will have to pay an equivalent of NGN 50 as Electronic Money Transfer Levy (EMTL) at the exchange rate in order to be determined by the Central Bank of Nigeria (CBN).

The new regulation follows the EMTL law signed in 2022, which placed an NGN 50 fee on all deposits above NGN 10,000. The decision to transition to electronic transfers represents an extension of the Stamp Duty Act, which became live through the Finance Act 2019. At the same, multiple customers choose the services provided by fintech companies instead of banks, mostly for the cheap transaction costs, as well as the fast and secure suite of services, regardless of the concern raised on the security and privacy of depositors’ funds while using a digital wallet in the custody of digital-first banks.

Some of the fintech operators have seen a surge in the number of customers recently though, as a result of the rise in the number of individuals transacting electronically. Results of the new regulation Across many cities, multiple banks and financial institutions joined the process of issuing the NGN 500 and NGN 1000 notes in their vault, while the overall management procedure has reportedly become a challenge. Throughout the adoption of the new law, financial institutions and banks faced a spike in the incorporation rate, as customers and individuals are confused about whether they should use the new notes or the old ones.

While some institutions accepted the new regulation and started adapting the new notes into their administrative process, some traders and companies insist on hearing an opinion from the president before they start implementing the notes, which the Supreme Court mentioned will remain valid until the year comes to an end. Moreover, the CNB has reportedly been constrained by the volume of cash that was said to be destroyed after the regulation went live. The institution received an order from the Supreme Court to restore the old naira notes that were burnt.

As a result, in regions such as Abuja, transport fares and taxes have increased, alongside the prices of groceries, as sellers and drivers charge customers more. .