Lagos – An expert in the electronic payment (e-payment) platform has advised government to consider granting tax relief to consumers as a way to encourage the use of such payment systems.
Agada Apochi made the recommendation following reports of slow embracement of the platform that the Central Bank of Nigeria (CBN) wants adopted.
He said tax relief measures would boost the current low record on e-payment patronage in the country.
“Government can do a lot by creating the right incentives to enhance the adoption of e-payments in the country. If Government offers tax incentives for e-payments, it will be an effective tool to encourage a cashless culture,” he said at an event in Lagos.
Apochi added, “That does not mean lower tax collection by government. Rather, Government tax collection will increase. For instance, if Government were to offer 50 percent incentive on Value Added Tax (VAT) for payments made electronically, Government tax collection could increase by several multiples. 2.5 percent VAT on N100 million transactions is higher than 5 percent VAT on transactions of N10 million. Currently, many transactions are not tracked because of cash payments and that is to the disadvantage of Government.”
He advised customers to embrace the e-payment option as it remained the better and safer way of doing transactions.
Concern has been raised at the slow adoption of e-payments.
Analysts believe this is a result of fears of fraud.
Weekly volume of transactions on Point of Sales is currently estimated at 200 000 on some 150 000 deployed terminals.
Weekly value of transactions is put at N3.4 billion.
The e-payment solutions are central to CBN’s initiatives to lessen cash transactions and transform Nigeria into a ‘cashless economy.’
– CAJ News