The Electronic Money Transfer Levy Regulations, 2022, signed by the former Minister of Finance, Budget, and National Planning, Mrs. Zainab Shamsuna Ahmed, mark a significant step in regulating electronic money transfers in Nigeria. These regulations, authorized under Section 89A(3) of the Stamp Duties Act Cap. S8 Laws of the Federation of Nigeria, 2004, as amended by the Finance Act, 2021, aim to streamline the imposition, administration, collection, and remittance of the Electronic Money Transfer Levy (the Levy), which was introduced by the Finance Act, 2020.

Key Provisions of the Regulations

1. Singular Levy: The Regulations establish a one-off levy of ₦50 on recipients of electronic receipts or transfers amounting to ₦10,000 or more. For transactions in other currencies, the levy will be determined based on the Central Bank of Nigeria’s exchange rates.
2. Administrator: The Federal Inland Revenue Service (FIRS) is designated as the administrator of the Levy, responsible for its assessment, collection, and proper accounting.
3. Collection and Remittance: Receiving banks are mandated to collect and remit the Levy to the FIRS promptly, either on the next working day after the transaction or as per FIRS-prescribed timelines. The levy must also be deducted from walk-in customers’ payments if they do not hold an account with the bank.
4. Record-Keeping: Banks are required to maintain records of electronic transfers subject to the levy for a minimum of seven years and provide daily lists of cancelled or reversed transactions, including related levies.
5. Reporting: Banks must submit periodic returns of levies collected and remitted, along with details of reversals or cancellations, to the FIRS within specified timelines.
6. Penalties: Non-compliance with levy collection or remittance attracts penalties ranging from 150% of the uncollected levy to additional penalties and interest in case of failure to remit collected levies.

Commentary and Recommendations

While the regulations provide a structured framework for levy administration, some provisions may need revisiting for consistency and alignment with existing laws:

1. Record-Keeping Duration: The requirement for banks to keep records for seven years may conflict with the Companies and Allied Matters Act, 2020, which specifies a six-year record-keeping period. Alignment with CAMA’s provisions is recommended.
2. Penalty Structure: The penalties introduced in the Regulations should align with those stipulated in the FIRS (Establishment) Act to avoid inconsistencies and ensure legal coherence.
3. Regulatory Review: A comprehensive review of the Regulations vis-à-vis the Stamp Duties Act, CAMA, and FIRS (Establishment) Act is necessary to harmonize provisions and avoid undue burden on taxpayers.

In conclusion, while the Electronic Money Transfer Levy Regulations provide a necessary framework for levy administration, ongoing review and alignment with relevant laws will enhance clarity, compliance, and effectiveness in electronic money transfer regulation within Nigeria.

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