E-Financial
FG to Rake in N1.5Bn Monthly from Stamp Duty on PoS
Federal Government is to realise at least N1.5 billion monthly from the implementation of N50 stamp duty charges on transactions carried out via Point of Sales (PoS)) terminals.
This is based on data released so far by the Nigeria Interbank Settlement System (NIBSS), which showed that monthly average volume of PoS transactions in the country stood at 31 million, according to New Telegraph.
Already, filling stations, supermarkets and other merchants using PoS machines have started adding the fees to their customers’ bills after purchases. Before now, fees were paid by merchants on the aggregate PoS transactions carried out on a particular period, which was never passed to customers.
However, a CBN directive issued on September 17, 2019, compelled banks to charge N50 stamp duty on individual transactions, rather than merchants’ accounts.
With the cashless policy gaining traction, Nigerians have embraced PoS for payment, hence, it has been recording the highest value and volume of transactions, compared to other e-payment platforms. If the monthly volume of transactions on PoS is sustained despite the charges, the N50 charge will amount to over N1.5 billion monthly revenue for government.
NIBSS data for the half year 2019 showed that Nigerians spent N1.38 trillion over PoS, which was 36 per cent increase over the value recorded in the same period last year, which stood at N1.01 trillion.
According to NIBSS, the growth in value was a reflection of the increase in volume of transactions over the channel. The number of transactions within the six months period rose by 55 per cent to 187.6 million, compared with N120.7 million of last year.
A breakdown of the volume of transaction showed that 28.1 million was recorded in January, 25.7 million in February, 29.8 in March and in April, 33.3 million transactions were recorded. In May, the transaction figure rose to 35.4 million, while 35 million was recorded in June.
However, stakeholders are worried that the introduction of stamp duties to be paid by the customers may reverse the gains recorded over the years, even as they fear that government’s cashless policy would be negatively affected.
According to an Executive Director at Inlaks, an integrated payment system company, Mr Tope Dare, the policy will discourage many from using PoS and, in effect, slowing down the cashless policy of CBN.
“Some small merchants who know the impact such charges may have on their sales are also considering dropping the machines to collect cash. While the big merchants like filling stations and superstores may not toe that line, the customers would not want to be paying extra charges and may go for cash payment instead of using their cards,” he said.
While noting that CBN may have good intention in introducing the charges, he said impacts of the policy must be evaluated by the regulator to see how it has fared.
“Whenever regulators issue policy, they should go out to test impact. They must be able to know whether it is working or not
or whether it is having different effect from what was intended. When we just issue policies and sit down in our offices, we may have problems,” he said.
Also speaking, Mr Festus Akwaja, a financial analyst, said the implementation of PoS charges was capable of weakening the financial inclusion drive and financial development goal as a whole.
He added that the stamp duty charge was an anti-financial inclusion policy as it is capable of discouraging small businesses and the very poor from coming into the banking space.
“We suggest that CIBN should make presentation to the authorities for certain set of businesses, accounts and payment platforms such as PoS to be exempted from the stamp duty charges,” he said.
Meanwhile, in a report titled: “Returns on Stamp Duty Collection for Merchant Transactions,” NIBSS said the new stamp duty payment was in line with the provision of the Stamp Duties Act and Federal Government Financial Regulation 2009.
The policy, it added, was aimed at ensuring strict adherence to the CBN guideline communication on the subject, collection and Remittance of Statutory Charges on receipts to Nigeria Postal Service under the Stamp Duties Act dated 15th January 2016.
Nigerian banks have resumed processing international tuition payments from Naira accounts through the Central Bank of Nigeria (CBN)’s Form A portal.
Form A is an application form designed by the Central Bank of Nigeria to pay for service transactions (invisible trade).
The form allows customers to purchase foreign exchange at the CBN or interbank rate to make payments for eligible services as predetermined by the foreign exchange manual.
This development comes a month after commercial banks announced the resumption of international transactions on their naira cards.
In an email to customers, Guaranty Trust Bank Limited (GTBank) and Lotus Bank announced that the service is now available for applicants paying undergraduate and postgraduate tuition fees abroad.
“Pay international tuition fees directly from your Naira account,” the notice from GTBank read.
To access the service, customers are required to register and submit their applications via the Trade System Portal at www.tradesystem.gov.ng.
GTBank explained: “Select the ‘Form A’ application for Educational Fees. Choose GTBank as the processing bank, attach required documents, and submit the application.”
Similarly, Lotus Bank stated, “Register on the Trade System Portal. Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application.”
In a similar notice, Lotus Bank also informed customers of processing international fees using its facility.
“Register on the Trade System Portal (www.tradesystem.gov.ng). Select Form ‘A’ application for Educational Fees. Choose Lotus Bank as the processing bank, attach required documents, and submit the application,” the bank said.
In 2022, Nigerian banks said international school fees and upkeep requests via Form A will be processed within 120 days due to forex scarcity at the time.
Safaricom, M-PESA and PayPal have announced a strategic collaboration to enable account linking and seamless fund transfers across their networks.
This collaboration aims to empower more than 35 million M-PESA customers and two million businesses and micro traders in Kenya to access PayPal’s global network.
By first linking their PayPal and M-PESA wallets, users can easily transfer funds from their PayPal accounts into their M-PESA wallets, and vice versa. This service is designed to enhance the experience for customers and businesses transacting between the two platforms.
The solution is currently available to Safaricom M-PESA customers in Kenya, with plans to roll out the service to the other M-PESA markets in the future.
“As globalization and digitization continue to reshape how people and businesses connect, our partnership with PayPal is a bold step forward in enabling seamless, worry-free, safe, secure, and inclusive digital payments.
“This collaboration empowers over thirty-five million customers and two million businesses and micro-entrepreneurs across Kenya to participate in the global digital economy by conveniently sending and receiving payments across more than 200 markets. It’s part of our commitment to unlocking opportunities and transforming lives through the power of M-PESA,” said Esther Waititu, Chief Financial Services Officer, Safaricom PLC.
“Building seamless connections between the global economy and local financial ecosystems is crucial to expanding digital financial inclusion,” said Otto Williams, Regional Head and General Manager for the Middle East and Africa, PayPal. “We are thrilled to enable millions of M-PESA’s customers across Africa connect more easily to PayPal’s international customer base.”
For 18 years, M-PESA has driven financial inclusion and bridged the digital divide. With M-PESA Kadogo, introduced in 2016, Safaricom waived fees for transactions of Kshs 100 and below, making digital payments more accessible. Now, through Ziidi MMF, customers can invest from as little as Kshs 100, promoting a culture of saving and financial wellness.
The partnership will tap into the emergence and growing popularity of the gig economy that has seen a rise among Africans accepting online jobs for clients across the world.
It equally marks a growing trend of interoperability between fintech providers with a goal of providing customers with a digital financial ecosystem that meets their needs by combining different capabilities.
PayPal is a leading global payment processor with more than 400 million active PayPal accounts operating across 200 markets, while M-PESA is Africa’s leading mobile money service connecting more than 50 million customers across Africa, 2 million businesses and micro traders, with more than $1.1 billion transacted daily.
Federal government has mandated banks and financial institutions to begin reporting monthly transactions exceeding N25 million for individuals and N100 million for firms to the tax authorities.
Under the new provisions of the Nigerian Tax Act, financial institutions are required to submit quarterly returns to the Federal Inland Revenue Service (FIRS).
The agency will be renamed to the Nigeria Revenue Service (NRS) from January 2026, when the new tax system will take effect.
“Every person who has an obligation to deduct and remit tax under this Act or any other Returns for tax legislation shall render monthly returns to the appropriate tax authority, as specified deduction of tax in the regulation issued for that purpose,” the Act reads.
“Without prejudice to section 142 of this Act, every bank, insurance company, stock-broking firm, or any other financial institution, shall prepare, with or without demand be delivered by the relevant tax authority, quarterly returns to the relevant tax authority specifying the names and addresses of new customers;Nigerian fashion trends
“…and existing customers in the case of (i) an individual, all transactions where the cumulative transactions in a month amount to N25,000,000 or more, or (ii) a body corporate, all transactions where the cumulative transactions in a month amount to N100,000,000 or more.”
Prior to the new tax law, banks were mandated to report deposits of N5 million — a measure intended to curb illicit financial flows, according to TheCable
Experts said the shift is part of efforts to tighten anti-money laundering reporting in the financial sector.
In 2023, Nigeria was listed on the grey list by the Financial Action Task Force (FATF) over deficiencies in tackling money laundering and terrorism financing.
Since then, the country has been making efforts to exit the grey list, which subjects it to increased monitoring by the FATF.
In November 2024, Hafsat Bakari, chief executive officer (CEO) of the Nigerian Financial Intelligence Unit (NFIU), said Nigeria has achieved upgrades in five key recommendations from the FATF.
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