Money  

Concerns Over N50 Stamp Duties Collection By Banks

Godwin Emefiele, CBN Governor

Godwin Emefiele, CBN Governor

WHEN in June last year the Nigerian Postal Service (NIPOST) announced that it had concluded plans to enforce the use of stamp duties on all transactions subject to the payment of N1000 and above which must be receipted, not many Nigerians got the message.

The agency’s Acting Manager, Corporate Communications, Mrs. Antonia Sagbeke who made the announcement had rightly stated that many Nigerians were not aware of the Stamp Duties Act, while those who were aware did not adhere to it. She also gave the indication that the organisation would embark on aggressive sensitisation of members of the public on the need to obey and adhere to the use of adhesive postage stamp on all transactions.

Section 89 (2) of the Stamp Duties Act CAP S8 of 2004 provides that, “every receipt, voucher, contract note, agreement among others given by any person in acknowledgement of goods purchased or services rendered should be denoted by an adhesive postage stamp.”

“Section 11 of the Act, provides that an instrument such as receipt denoted by an adhesive postage stamp shall be deemed stamped only when the person required by law to cancel such adhesive postage stamps cancel the same by writing on or across the stamp his name or initials or the name or initials of his/her firm together with the true date.”

Section 92 of the Act makes it a criminal offence punishable on conviction if any person “gives a receipt for any goods or services up to N1000, but not duly stamped or refuses to give a receipt duly stamped where a receipt will be liable to duty or upon the payment to the amount of N1000 or upwards, gives a receipt for a sum not amounting to N1000 or separates or divides the amount paid with the intent to evade duty.”

Although the sensitisation campaign on the Act as promised by NIPOST never came, doubts about whether or not it would be able to enforce the law ended on Friday, January 15, this year, with a circular from the Central Bank of Nigeria (CBN) directing all Money Deposit Banks (CBN) and other financial institutions to with immediate effect “commence the charging of N50 per eligible transaction in accordance with the provisions of the Stamp Duties Act and Federal Government Financial Regulations 2009.”

The circular, which was titled “Collection and Remittance of Statutory Charges on Receipts to Nigeria Postal Service Under the Stamp Duties Act” read: “As part of efforts to boosts its revenue base, the Federal Government is exploring revenue opportunities in the non-oil sectors especially taxes and rates. It is in recognition of this fact that banks and other financial institutions are enjoined to support government’s revenue generation drive through compliance with the provisions of the Stamp Duties Act, LFN 2004 as reinforced by the court judgment in Suit No FHC/L/CS/1710/2013. In this regard, the CBN pursuant to the provisions of its enabling laws, hereby issues this circular to all DMBs and other financial institutions.

“With immediate effect, all DMBs and other financial institutions shall commence the charging of N50 per eligible transaction in accordance with the provisions of the Stamp Duties Act and Federal Government Financial Regulation 2009, that is, all receipts given by any bank or other financial institution in acknowledgment of services rendered in respect of electronic transfer and teller deposits from N1, 000 and above.

“For the avoidance of doubt, the following receipts are however exempted from the imposition of Stamp Duties: (a) payments deposits or transfer by self to self whether inter or intra bank; (b) any form of withdrawals/transfers from savings accounts.

“It should be noted that these charges are only payable by receiving accounts.

“Each DMB shall open an account designated as NIPOST Stamp Duties Account into which all charges collected shall be paid. The balance in such accounts shall be transferred monthly by the DMBs to CBN NIPOST Stamp Duty collection account number.

“Other financial institutions shall remit their stamp duty collections to any DMB of their choice.

“Please be guided accordingly and ensure strict compliance.”

Investigations by The Guardian revealed that many of the DMBs have complied with the directive.

However, analysts have advised that for the policy to optimally benefit the citizenry, the CBN would need to tighten some loose ends in the arrangement.

A financial analyst, Mr. Joe Oluaoha expressed support for the policy but noted that NIPOST would need to have its own desks in all the banks for the policy to be effective.

Oluaoha said: “I am not against it; there is nothing we can do about it because the law has been there since 2004. So, it is just that government has started to implement it. The dwindling oil revenue is not there again so government has to look inward to see how it can cushion the effect. But Nigerians would want to see how the huge money that would be generated through this policy would be utilised. If people are making this sacrifice, it behooves the government to make sure that this money is optimally used to serve the people.”

He, however, noted that where the policy would have issues is that “the banks find it difficult to remit these remittances accurately most times.

Overtime, reconciliation will become a problem. For the government to really get what they want from the banks, they need to make sure that NIPOST has its own desks in all the banks that capture the transactions on a daily basis and have appropriate way of recognising it. This will also create employment for thousands of Nigerians.”

He added: “ I also want to state that the N50 flat duty was not well thought out. What it means is that somebody that is receiving N1 million and somebody that is receiving N1, 000 will be taxed the same amount. So, it is not equitable; they should have a way of graduating it in such a way that the tax will be tangential to whatever one is receiving. As I said earlier, I am not against the policy but if somebody who is supposed to receive N1, 000 is losing N50 from it to the government, somebody who is supposed to receive N1 million should be taxed more. People are very, very impoverished in this country. So, they have to revisit the law.”

Receive News Alerts on Whatsapp: +2348136370421


No comments yet

Related