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FG Generates N103.7bn from Cash Transfer Taxation

Published by Tope Fakinlede on October 12th, 2024.

FG Generates N103.7bn from Cash Transfer Taxation

The Federal Government of Nigeria has earned N103.7 billion from Electronic Money Transfer Levies in the first half of 2024. This figure, as reported by the Central Bank of Nigeria’s statistical bulletin, reflects a 7.55% increase from the N96.44 billion collected during the same period in 2023.

This revenue growth underscores the rising popularity of digital payment platforms and the increasing volume of electronic transactions as more Nigerians and businesses turn to digital banking solutions.

The Electronic Money Transfer Levy was established as a revenue source through the Finance Act 2020, which amended the Stamp Duty Act to capitalize on the growth of electronic funds transfers in Nigeria. The levy imposes a one-time charge of N50 on any electronic receipt or transfer of N10,000 or more deposited in any bank or financial institution.

In January 2024, revenue from the levy reached N18.60 billion, down 26.57% from N25.33 billion in January 2023. However, February 2024 saw a 20.21% increase, with collections rising to N16.59 billion from N13.80 billion the previous year. March 2024 also experienced growth, with revenue at N18.60 billion, a 53.41% increase from N12.13 billion in March 2023.

April 2024 generated N15.37 billion, a slight increase of 1.85% compared to April 2023’s N15.09 billion. In May 2024, earnings rose significantly to N18.78 billion, marking a 24.24% increase from N15.12 billion in May 2023. Although June 2024 saw a minor decline from May’s figures, with collections at N15.78 billion, this still represented a 5.40% increase from N14.97 billion in June 2023.

Earlier reports indicated that e-payment transactions in Nigeria surged by 86.44%, reaching N566.39 trillion in the first half of 2024, up from N303.60 trillion in the same period last year, according to the Nigeria Inter-Bank Settlement System. The Nigeria Instant Payment (NIP) platform, launched in 2011 by NIBSS, facilitates real-time interbank payments and has become widely accessible through various channels, including internet banking, mobile apps, USSD, ATMs, POS, and bank branches.

The rise in e-payment transactions has been attributed to the growing acceptance of digital payment methods, driven by their convenience and efficiency. Last year, electronic payment transactions reached a record high, increasing by 55% to N600 trillion compared to N387 trillion in 2022.

However, as telecom operators in Africa invest more in the mobile money sector, they face significant fraud challenges, prompting calls for enhanced security measures. According to the Global System for Mobile Communications Association’s “State of the Industry Report on Mobile Money 2023,” mobile money fraud in Africa surpassed $1 billion, raising concerns that security issues could hinder the growth of mobile money services.