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FG to Rake in N1.5Bn Monthly from Stamp Duty on PoS

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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.


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E-Financial

SEC Restates Commitment to Transparency in Fintech Regulation

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Securities and Exchange Commission (SEC) has assured stakeholders in the fintech space it is committed to ensuring transparency and integrity in the regulation of the space.

SEC Restates Commitment to Transparency in Fintech Regulation

Dr. Emomotimi Agama, director general, SEC, said it has provided a level playing field to all applicants.

Agama, stated this during a meeting with Regulatory Incubation and Accelerated Regulatory Incubation Program applicants on Monday.

The SEC DG stated that the commission understands the anxiety and the need to be regulated but added that they have to be very careful even in its desire to be inclusive.

He said, “The process of registration is a very technical process because registration is the hallmark of regulation. It goes beyond onboarding and registering, it requires monitoring, education, and surveillance and all of these are continuous. This journey is a new one that we have not gone through before. As we continue, we will find challenges, which we need to solve because every challenge is solvable.

“I am here to assuage fears being exhibited, we have provided a level playing field but as a government institution we must take things into context while doing this. The groups that were admitted into the ARIP and RI are beginning to see that we have started demanding for some information, operational updates and more regulatory requirements in line with the concept of a Regulation Incubation Programme or a Sandbox as some other institutions call it. In doing this, we are understudying what they are doing and the risk that they pose to investors and to themselves.

“We have not only done that, we have also issued new regulations to the public, which we call an exposure document. If you look at it, it is an upgraded version of our earlier regulations and the regulation making process demands that we get your views as stakeholders before it becomes a regulation.”

Agama stated that the inputs of stakeholders is important as regulators cannot claim to know everything adding that the rules would be amended to include all valid points to make it an all-inclusive document.

He further disclosed that the commission has increased the space to include more regulations to accommodate more individuals, more institutions and more functions because accommodation is the stance of the government regarding the space.

 

 

 


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E-Financial

Ecobank Warns against Fraud during Yuletide

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Ecobank Nigeria has cautioned customers to be vigilant against fraudsters during the Yuletide while promising uninterrupted access to banking services through its digital platforms throughout the holiday season.

Ecobank Warns against Fraud during Yuletide

In a statement on Monday, Adeola Ogunyemi, head, Consumer Banking at Ecobank Nigeria, emphasised that customers can continue their shopping and transactions smoothly via the bank’s various digital channels.

Ogunyemi highlighted the Bank’s long-standing commitment to digital transformation, which aims to improve customer experience and provide alternative access to banking services.

Ecobank Nigeria is an affiliate of the Ecobank Group, the leading pan-African banking group.

The bank offers a comprehensive suite of financial services and solutions to consumer, commercial, corporate, and investment banking customers at over 240 branches and 35,000 Xpress Point agencies across Nigeria.


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E-Financial

CBN Permits BDC Operators to Buy FX from NAFEM During Festive Season

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Central Bank of Nigeria (CBN) has announced that eligible Bureau de Change (BDC) operators will have temporary access to the Nigerian Autonomous Foreign Exchange Market (NAFEM) to purchase $25,000 weekly. This arrangement, aimed at addressing seasonal foreign exchange (FX) demand, will be effective from December 19, 2024, to January 30, 2025.

In a statement signed by T.G. Allu, CBN’s acting director of trade and exchange, the apex bank said BDC operators would buy FX from authorized dealers—banks licensed by the CBN—exclusively to meet retail market demand.

“To meet expected seasonal demand for foreign exchange, the CBN is allowing temporary access for all existing BDCs to the NAFEM for the purchase of FX from Authorized Dealers, subject to a weekly cap of $25,000,” the statement read.

BDC operators must fully fund their accounts before accessing the market at prevailing NAFEM rates, choosing only one authorized dealer for transactions under this arrangement. A maximum price spread of 1% is allowed for retail pricing by BDCs, and all transactions will be reported to the CBN’s Trade and Exchange Department.

The CBN reiterated that personal travel allowance (PTA) and business travel allowance (BTA) remain available through banks for legitimate travel needs. The bank emphasized that all FX transactions must be conducted at market-determined exchange rates.

“The CBN remains committed to a fully functional foreign exchange market and will continue to provide liquidity when necessary to manage price volatility,” the statement added.

Earlier in September, the CBN approved FX sales to eligible BDC operators at a rate of N1,590 per dollar to cater to demand for invisible transactions, reflecting ongoing efforts to stabilize the FX market.


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