No More N200/ N10K: PoS Operators Hike Charges Amid New FG EMTL Deductions
No More N200/ N10K: PoS Operators Hike Charges Amid New FG EMTL Deductions
The recent implementation of the Electronic Money Transfer Levy (EMTL) by the Federal Inland Revenue Service (FIRS) has sparked a significant shift in financial transactions across Nigeria. As the policy takes effect, Point of Sale (PoS) operators have been compelled to revise their charges, leaving Nigerians to bear the financial burden.
What is the EMTL and Why It Matters
The Electronic Money Transfer Levy (EMTL) is a N50 charge applied to electronic inflows of N10,000 and above. Mandated by the FIRS on behalf of the Nigerian government, this levy aligns with the 2020 Finance Act and is part of efforts to boost government revenue. The policy covers mobile money transfers, internet banking, and other electronic inflows.
While initially scheduled to commence on September 9, 2024, the policy was delayed due to public outcry. However, on December 1, 2024, fintech platforms, including Opay, PalmPay, and Moniepoint, began implementing the deductions, notifying customers of the mandatory charges.
Impact on PoS Operators
For PoS operators, the EMTL has introduced a new layer of operational complexity. Effective December 2, 2024, they have increased their charges by 25% to accommodate the levy. The operators revealed that the additional N50 charged on every N10,000 inflow impacts their profit margins, forcing them to pass the cost to customers.
According to Olugbenga Toki, a PoS operator, the changes have been met with mixed reactions. While some customers understand the situation, others are dissatisfied and unwilling to pay the extra fees.
“I have been telling my customers that the charges have changed. However, some understand while others walk away,” Toki shared, expressing frustration over the new policy.
Adedayo Adeleke, another operator, disclosed that the current cash scarcity has further exacerbated the situation. With limited cash sources such as market women, petrol stations, and black markets, operators face additional hurdles in maintaining profitability.
Breakdown of New Charges by PoS Operators
The revised charges by PoS operators reflect the direct and indirect costs of the EMTL. For instance, receiving N10,000 on behalf of a customer now attracts a total charge of N75, which includes the N50 levy and an additional N25 operational fee. This adjustment ensures operators cover their costs while maintaining a profit margin.
Reactions From Fintech Platforms
Fintech companies like Opay, Moniepoint, and PalmPay have clarified their roles in the EMTL implementation. In messages sent to customers, the platforms explained that the N50 charge is remitted entirely to the FIRS and does not benefit them in any way.
Moniepoint’s notification read:
“Dear customer, you will be charged stamp duty of N50 on inflows of N10,000 and above. Moniepoint collects and remits this on behalf of FIRS.”
Similarly, Opay emphasized the mandatory nature of the charge, stating:
“Please be informed that starting December 1, 2024, a one-time N50 charge will be applied to electronic transfers of N10,000 and above paid into your personal or business account in compliance with FIRS regulations.”
Public Backlash and Concerns
The EMTL implementation has reignited debates about its fairness and potential impact on ordinary Nigerians. Various groups, including the National Association of Nigerian Students (NANS), have criticized the policy, urging the government to reconsider its position. Critics argue that the levy disproportionately affects small businesses and low-income earners, who rely heavily on electronic transactions for daily operations.
Despite the backlash, the government remains resolute, citing the levy as a crucial step toward increasing revenue and reducing the fiscal deficit.
The Broader Implications of the EMTL
Beyond PoS operators and fintech platforms, the EMTL has broader implications for Nigeria’s financial ecosystem. Key issues include:
1. Increased Cost of Financial Transactions:
With the levy now in effect, Nigerians face higher costs when sending or receiving funds electronically. This could discourage the use of electronic payment systems, countering efforts to promote a cashless economy.
2. Operational Strain on Small Businesses:
Many small businesses that rely on PoS transactions may struggle to absorb the additional costs, potentially leading to reduced profitability or higher prices for consumers.
3. Erosion of Trust in Financial Systems:
The EMTL’s implementation has highlighted the lack of transparency and consultation in policy-making. Restoring public trust will require clearer communication and a demonstration of the levy’s tangible benefits.
Previous Attempts to Implement the EMTL
The EMTL is not a new concept. It was first introduced under the 2020 Finance Act but faced significant opposition from stakeholders. In September 2024, fintech platforms announced plans to begin deductions, prompting widespread protests. The federal government postponed the implementation, only to reintroduce it in December with limited adjustments.
Looking Ahead: The Way Forward
As Nigerians grapple with the realities of the EMTL, stakeholders must explore solutions to minimize its impact. Recommendations include:
- Government Intervention:
The government could consider reducing the levy or introducing exemptions for certain categories of transactions, such as those involving small businesses or low-income individuals.
- Enhanced Public Awareness:
Clearer communication about the purpose and benefits of the EMTL can help address misconceptions and foster greater acceptance.
- Innovative Financial Solutions:
Fintech platforms could develop new products to offset the cost of the levy, such as loyalty programs or discounts for frequent users.
Conclusion
The implementation of the EMTL marks a turning point in Nigeria’s financial landscape. While the levy aims to boost government revenue, its impact on PoS operators, small businesses, and everyday Nigerians cannot be ignored.
No More N200/ N10K: PoS Operators Hike Charges Amid New FG EMTL Deductions
Kpomkwem – News Exactly As It Is will continue to monitor this development, providing updates and insights as the situation unfolds. For now, Nigerians must brace for higher transaction costs while advocating for policies that prioritize economic growth and inclusivity.
