The Federal Government raked in N13.87billion from the Electronic Money Transfer (EMT) levy between January and November last year, latest data released by the Federal Min-istry of Finance, Budget and National Planning, shows.
However, the amount is N444. 46billion (97 per cent ) less than the N458.33billion that the government had projected to realise from the EMT levy for the period, according to the update on the 2021 Budget implementation given by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, during the public presentation of the approved 2022 Budget held in Abuja last Wednesday.
It is also significantly lower than the N462 billion that the World Bank had projected in June that Nigeria would earn from the EMT levy in 2021.
The EMT levy is a one-off charge of N50 on electronic receipts or electronic money
transfers deposited in any deposit money bank (DMB) or financial institution in the sum of N10,000 or more. The levy, which applies to all account types, is part of the Finance Act 2020 that came into effect in January 2021
and replaces section 89(3) of the Stamp Duties Act (SDA), under which, N50 used to be levied on electronic payments above N1,000.
According to the Finance Act 2020, revenue earned from the N50 levy on electronic money transfer of up to N10,000 or more should be shared based on derivation 15 per cent to the Federal Government and Federal Capital Territory (FCT) and 85per cent to the states.
Althoughanalystsgenerally welcomed the introduction of the EMT levy, as they said it resolved the controversies on the relevant government agency empowered to administer and collect the stamp duties levy applicable on transfers between individuals and also provided a basis for sharing the collection amongst the FG, FCT and the state governments, there is concern in official circles that EMT levy collections continue to be below budget targets.
In fact, the Ministry of Finance Budget and National Planning, in one of its 2022 budget circulars, lamented that the low revenue from the EMT levy and other sources negatively impacted government’s implementation of the 2021 budget. The ministry said: “As at June 30, 2021, FGN’s retained revenue was N2.23 trillion (67 per cent of the N3.99 trillion pro-rated budget).
The shortfall of 33 per cent is attributable to the underperformance of both oil and some nonoil revenue sources such as the Electronic Money Transfer Levy (EMTL), Recoveries & Fines etc.”
In contrast to the relatively low EMTL collections, the Ministry noted that Company Income Tax (CIT) and Value Added Tax (VAT) collections were ahead of the budget targets with N397.02 billion and N129 billion, representing 116.5 per cent and 108.2 per cent respectively of the prorated targets for the first six months of 2021.
Similarly, New Telegraph’s analysis of the Ministry’s update on the 2021 Budget implementation (January-November) shows that unlike actual collection for the EMT levy (N13.87billion) which was 97.0 per cent lower than the prorated target of N458.33billion, the actual collections for CIT (N718.58billion and VAT (N360.56billion) during the period, exceeded prorated targets by 15 per cent and 65 per cent respectively.