Banks to Collect Stamp Duty on Foreign Transactions

Banks are set to charge customers stamp duty on old foreign transactions between January 2021 to December 2023 by January 31, 2024.

This is according to a directive from the Federal Inland Revenue Service. Access Bank disclosed this in a recent letter to its customers.

According to the bank, the electronic money transfer levy was only applicable to accounts receiving electronic deposits of N10,000 and above or its equivalent; it however noted that starting from January 2024, the deduction would now extend to foreign currency inflows equivalent of N10,000 and above.

“We write to inform you of the Federal Inland Revenue Service notice to all banks, in line with the Finance Act 2020 and Stamp Act 2004, to remit the Federal Government Electronic Money Transfer Levy from foreign currency inflows,” the bank said.

It explained, “Previously, the Electronic Money Transfer Levy was solely applicable to accounts receiving electronic deposits of N10,000 and above or its equivalent. However, starting January 2, 2024, the deduction will be extended to FCY inflows equivalent of N10,000 and above, incurring a charge of N50 (FCY equivalent).”

The bank highlighted, “In compliance with this notice, outstanding Electronic Money Transfer Levy of FCY inflows from January 2021 to December 2023 are also to be deducted by January 31, 2024.”

Based on this new rule, stamp duty will apply to foreign transactions of $11.02 (at N907.11/$) and above. The EMT levy was introduced in the Finance Act 2020, which amended the Stamp Duty Act and aims to improve government revenue from the growth of electronic funds transfer in Nigeria.

It is a singular and one-off charge of N50 on electronic receipt or transfer of money deposited in any deposit money bank or financial institution on any type of account on sums of N10,000 or more. This revenue was shared based on derivation and distributed between the Federal Government and state governments.