The Federal Government has reviewed the N50 stamp duty charge on electronic payments in the country following public outcry and a reported drop in the number of Point of Sale (POS) transactions.
The new Financial Bill now states that the N50 charge would be imposed on transactions above N10,000 compared with N1,000 that had previously taken effect across the country in September.
Recall that the Central Bank of Nigeria in a circular released in September authorised banks to unbundle merchant settlement amounts and charge applicable taxes and duties on individual transactions as stipulated by regulators.
This translates to stamp duty payment on individual transactions that occur on POS, rather than on aggregate transactions previously. The merchant service charge was also reviewed downward from 0.75% capped at N1,200 (US$3.33) to 0.5% capped at N1,000.
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Also in September, another circular stated that daily withdrawals and deposits by individuals that exceed N500, 000 attract a 2% charge on the excess deposits and 3% charge on the excess withdrawals while daily withdrawals and deposits by corporates exceeding N3 million attract a 3% charge on the excess deposits and a 5% charge on excess withdrawals.
This, according to the CBN noted was aimed at reducing the amount of physical cash in circulation and encouraging more electronic-based transactions. Discouraging cash-based transactions, and at the same time imposing multiple charges on electronic-based transactions appears counterproductive.
Nigerians, especially bank customers complain that they are made to face several charges by the financial institutions.
These include N52.50 monthly card maintenance fee; N65 after third withdrawal on remote-on-us Automated Teller Machines, N4 for SMS alerts, N52 deduction in electronic transfer service.
Many banks also charge fees for hardware token and for one-time pin SMS charge. Introducing stamp duty on POS transactions may not be ideal to achieve CBN’s financial inclusion goals as well as support a cashless economy, thus we feel the revision is a welcome development.