Financial technology firms have begun imposing fees on electronic transfers to personal and business accounts in accordance with regulations set by the Federal Inland Revenue Service.

In a communication to its clients on Saturday, OPay, a prominent fintech company, announced, “Dear valued customers, please be advised that effective September 9, 2024, a one-time charge of N50 will be applied for electronic transfers of N10,000 and above into your personal or business account, in line with Federal Inland Revenue Service regulations.”

The company emphasized that these fees are mandated by the government and do not serve as a revenue stream for the payment platform.

“It is crucial to understand that OPay does not gain from these charges, as all proceeds are directed entirely to the Federal Government,” the notice stated.

This fee implementation is part of the Federal Government's initiative to enhance revenue from electronic transactions through FIRS regulations.

Users of other fintech services, such as Moniepoint and PalmPay, have also indicated that these companies have started to apply similar charges.

A former Minister of Finance, Budget, and National Planning, Mrs. Zainab Ahmed, established the Electronic Money Transfer Levy Regulations, 2022, under her authority, in accordance with Section 89A(3) of the Stamp Duties Act Cap. S8 Laws of the Federation of Nigeria, 2004 (SDA), as amended by the Finance Act, 2021.

The regulations outline the framework for the imposition, administration, collection, and remittance of the Electronic Money Transfer Levy, which was introduced by the Finance Act, 2020. Key elements include a one-time levy of N50 on recipients of any electronic receipts or transfers of N10,000 or more.

For transfers in other currencies, the levy will be applied at exchange rates set by the Central Bank of Nigeria; the FIRS has been designated as the administrator of the Levy, responsible for its assessment, collection, and accounting.

The regulations stipulate that receiving banks must collect and remit the Levy to the FIRS by the next business day or on a date specified by the FIRS. For customers who do not have accounts and make walk-in transactions, the levy must be deducted from the total amount due.

Furthermore, banks are obligated to compile daily records of any cancelled or reversed transactions, which should include the name of the transferee, transaction amounts, levies deducted, and the amounts that were reversed or cancelled.

Any levies associated with reversed or cancelled transactions should be deducted from the collections of the following day and refunded to the affected customers.

Additionally, banks are required to submit monthly reports detailing the levies collected, including information on any reversals and cancellations, to the FIRS within 21 days following the end of each month. They must also maintain records of all electronic transfers subject to levies for a minimum period of seven years.

The regulations specify that banks failing to collect the Levy will incur a penalty amounting to 150 percent of the uncollected Levy. If a bank collects the Levy but does not remit it, the institution will be responsible for the Levy, along with a 50 percent penalty and interest calculated at the CBN’s Monetary Policy Rate.

Moreover, failure to submit accurate returns or to submit them at all will result in a penalty of 10 percent of the unreported or incorrectly reported amounts.

For the purposes of these regulations, banks are defined as “a deposit money bank or financial institution as referenced in Section 89A of the SDA, encompassing all banks and other financial institutions as defined under the Banks and Other Financial Institutions Act, 2020.”