Monday, March 18,
2019 01:07PM / By Proshare News / FA / Header Image
The current discourse about the level of service charge (increase) by Remita for and on behalf of the Federal Government of Nigeria (FGN) on revenues collected; and the additional burden it poses; has elicited reactions.
In this short thread, we try to unpack the key points related thereto or srising therefrom..
The natural starting point must be the November 18, 2018 Central Bank of Nigeria’s TSA Circular issued by the Banking Services Department; and which provides the the context, construct and guidance to appreciate the consequence (intended or not) of the implementation realities.
The Key Points to Note:
1. The FGN effectively passed/pushed the cost of collections to payers when it fixed the fees and announced same in November 2018 vide the circular reference No. BKS/CSO/CON/DIR/04/043.
2. The FGN was hitherto bearing these fees before now and thereafter decided to transfer the cost of the ‘FGN TSA e-collections’ to users (nay citizens); albeit, without any prior engagement or public announcement.
3. For purposes of policy model comparison, the approach adopted here reflects/appears to be the same model in use wherein students pay portal fees ‘in addition to’ the real cost of the services they are paying for.
4. The new charge is a uniform flat fee of N150 + VAT irrespective of the amount being paid to the Government, through any bank in Nigeria. In effect the person paying N10m and one paying N5K will pay the same fee of N150 flat + VAT; in the same way N65 flat applies irrespective of amount withdrawn from an ATM
5. The TSA fee is a Flat fee structure and not based on a percentage contrary to the current narrative and focus on Remita/Systemspecs as the CBN Circular makes clear.
6. The TSA fee in effect appears far cheaper than regular ATM withdrawal fee(s) which is N65 for every N20K withdrawn (number of times applies).
In the main, concerns about this new service charge will appear to have more to do with user enlightenment than its operational capability and effectiveness.
Strangely, investigations actually reveal that the FGN is still owing SystemSpecs/Remita, the banks and other service providers in the ‘TSA value chain’ payments in excess of N10bn for services provided to date.
The CBN Circular To:
· All Deposit Money Banks;
· The Managing Director, SystemSpecs Ltd; and
· All Licenced Payment Solution Service Providers (PSSPs).
NOTIFICATION ON THE CHARGEABLE FEE FOR PAYERS UNDER THE TREASURY SINGLE ACCOUNT (TSA) e-COLLECTIONS SCHEME OF THE FEDERAL GOVERNMENT
The Central Bank of
Nigeria hereby issue the Guidelines for payment for services rendered under the
e-Collection program of the Federal Government of Nigeria:
I. That all Payers using Other channels, apart from Cards (Bank Transfers, Mobile Payments, Bank teller points, USSD and all other channels) shall pay the sum of N150.00 (One Hundred and Fifty Naira only), per transaction. Hitherto, the Federal Government, through the OAGF has been bearing the charges on behalf of Ministries, Departments and Agencies (MDAs) and the revenue payers
II. That all Payers using Cards are to be charged N150.00 (One Hundred and Fifty Naira only) plus 0.75% of the amount being paid, subject to a maximum of N1,200.00 (One Thousand Two Hundred Naira only), per transaction.
III. The application of these charges is effective from 1st November 2018
It is necessary to note that this directive is without prejudice to the provision of Section 22.214.171.124 of the CBN Approved Guidelines on Operations of Electronic Payment Channels in Nigeria (April 2016), which stipulates that “A merchant shall under no circumstances, charge a different price, surcharge a cardholder or otherwise discriminate against any member of the public who chooses to pay with a card or by other electronic means.”
Furthermore, this directive only relate to payment of MDA’s revenue, taxes, levies, penalties, etc to the Federal Government of Nigeria, under the TSA scheme. It should also be noted that Central Bank of Nigeria will continue to regulate the fees for this service, as appropriate.
Consequently, all Deposit Money Banks and the licensed Payments Solution Service Providers (PSSPs) are advised to comply with this directive.
1. FGN Mandated Use of Electronic Means for Revenue Inflow into TSA – Sep 29, 2017
11. CBN Directs PMBs and DFIs to Comply with FG’s Directives on TSA – Nov 19, 2015