As far back as the early 1620s, the Netherlands introduced stamp duty in its search for more revenue to prosecute the war with Spain.
Revenue collector, Johannes van den Brooks is, however, credited with the invention of Stamp duty as an instrument of revenue before it was adopted by the British in 1670.
In Nigeria, it was introduced 1st of April 1939 as Ordinance 41 of 1939 (and subsequent amendments) and its administration is governed by the Stamp Duties Act, CAP S8, LFN 2004 (As Amended). Since 1939, the Federal Board of Inland Revenue (FBIR), which transformed in 1958 into the Federal Inland Revenue Service (FIRS), has been collecting Stamp Duty.
Similar to what the Dutch did, the federal government, through the Finance Act 2019, amended its Stamp Duty Act to generate more revenue. This amendment also recognises the technology, economic realities, e-commerce and cross-border transactions.
In Nigeria, it is a tax payable in respect of a dutiable instrument as provided under the Stamp Duties Act, and failure to deduct or remit the same into the Federal or State Stamp Duties Account attracts relevant penalties and interest as stipulated in the Act.
In the Second Schedule of the 1999 Constitution, stamp duties are domicilled on the Exclusive Legislative list (Item 58). The Concurrent Legislative list (Item 7) also empowers the state governments to administer it, in line with the conditions prescribed by the National Assembly.
Furthermore, the gazetted Finance Act 2020 amended S.4(1) of the Stamp Duty Act contained in S.(8) of the Law of the Federation of Nigeria 2004 to give the FIRS as the sole agency charged with the responsibility of assessing, collecting, and accounting for all tax types including stamp duties, on behalf of the Federal Government. These duties collected as tax are remitted into the Federation Account for onward disbursement to the three tiers of government, from which NIPOST benefits.
It is important to note that for instruments executed between individuals (not between companies) or a group of individuals), the relevant state tax authority collects stamp duties at a rate imposed by the State as agreed with the Federal Government.
Also important is the fact that this amendment by the Finance Act enabled the stamping of electronic documents.
AUDIT/RECOVERY OF UNREMITTED STAMP DUTIES
In June 2020, the Federal Government set up an Inter-Ministerial Committee to audit and recover back years, and unremitted stamp duties from institutions like Deposit Money Banks (DMB), Nigeria Inter-Bank Settlement System (NIBSS), Central Securities Clearing System (CSCS), Corporate Affairs Commission (CAC) amidst others.
THE EMT CONTROVERSY
In 2016, the Central Bank of Nigeria (CBN) introduced a circular mandating all Deposit Money Banks (DBMs) to implement a Stamp Duty charge on electronic transfers exceeding NGN1,000.
Following the controversies surrounding the subject at the time, a Federal High Court nullified the charge, but banks continued to collect it in defiance of the judgment.
This was, however corrected through the Finance Act 2019, which introduced some amendments to the Stamp Duty Act, including a ₦50 stamp duty charge on eligible transactions, which would later come to be known as the Electronic Money Transfer Levy (EMT).
36 STATES VS THE FEDERAL GOVERNMENT
The 36 state governments in the federation are also in court against the Federal Government.
They contend that they are legally vested with the authority to administer and collect stamp duties on all transactions involving individuals and persons within their territories, and not the federal government.
THE NIPOST/FIRS CONTROVERSY
In 2016, the then Accountant-General of the Federation also issued a circular mandating relevant bodies to remit all stamp duty revenues collected to the FIRS account with the CBN.
This development eventually led to disputes up to the Supreme Court between the Federal Inland Revenue Service (FIRS) and the Nigerian Postal Service (NIPOST) on the right to collect Stamp duties in respect of all receipts, electronic transfers, and teller deposits.
While the Finance Act placed the responsibility on the FIRS, NIPOST believes it is responsible for the collection.
A former Acting Postmaster-General of the Federation, Enoch Ogun, lost his plum job on March 29, 2016, over the controversial stamp duty.
His case is similar to Bisi Adegbuyi, a helmsman at NIPOST who was alleged to have lost his job a few days after he faulted the Minister of Finance, Budget and National Planning, Zainab Ahmed, on the balance in the Stamp Duty Account domiciled at the CBN.
The Minister was also accused of wanting to kill NIPOST by ceding the collection of stamp duty to the FIRS.
The Postal Service was also on a collision course with the then Minister of Communications, Adebayo Shittu, over the appointment of 30 companies to serve as stamp duty agents for the collection of stamp duty without approval.
The FIRS recently clarified that Adhesive Stamp was not the same as a postage stamp, which NIPOST administers to deliver items and documents.
THE 89.09 TRILLION NAIRA CONTROVERSIES
On Friday, 16th December 2022, Rep. Muhammed Gudaji Kazaure, a member of the House of Representatives, claimed that a Presidential Committee on the Reconciliation and Recovery of Stamp Duties Revenue from 2013, was ‘secretly’ formed by the President on August 8, 2022.
Noting that he was appointed as Secretary of the Committee, he accused the CBN governor, Godwin Emeifele, of ‘conniving’ with some presidency cabals to frustrate the committee’s effort to recover the unremitted stamp duty revenue.
The lawmaker who alleged N89.09 trillion revenue from stamp duties allegedly trapped in the banking sector explained that about $171 billion was found in the CBN’s private investors’ accounts, N23.4 trillion and N13 trillion was recycled as debt to the federal government.
According to him, the National Assembly was benefitting directly from the CBN governor. Thus, they prevented him from bringing the matter before the House of Representatives for investigation at the time he wanted to.
Presidential Media Aide, Garba Shehu, described the alleged mismanagement of N89.09 trillion stamp duty revenue as unfounded and a figment of the imagination. He stressed that the entire net worth of the nation’s financial sector, the assets of the banking sector put together, is not worth N50 trillion.
He also noted that it was an illegal committee which has to be dissolved on the directive of the President, adding that reconciliation of the stamp duty accounts is currently handled by another committee duly set up by the President in June 2020.
This ‘new committee’ has the Attorney-General and Minister of Justice as Chairman and the Chairman of the Federal Internal Revenue Service (FIRS) as Secretary.
The Central Bank is also quoted to have assured Nigerians that there is absolutely no problem whatsoever, with money from Stamp Duties,
On the part of the Speaker of the House of Representatives, Femi Gbajabiamila, the parliament inquired from the executive about the mandate of the said Committee, which they noted has been withdrawn.
He also noted that the House won’t interfere in the alleged investigation except to the extent that he tries to impugn on the integrity of members of the Green Chamber.
While it is perhaps possible that the disputed Stamp Duties Fund may not amount to N89 trillion. Can Nigerians know the true amount in contention?
According to statistics, the Finance Act amendment was instrumental to a 561% increase in the actual collection of stamp duty by the FIRS from 2019 to 2020.
This is definitely a huge amount of money and so, the numerous controversies around Stamp Duties is greatly understood. However, why has the duly-constituted committee handling the reconciliation taking as much as two years to conclude such an important assignment?
Are they likely to conclude before the expiration of the President’s tenure in May 2023, when the AGF would cease to be in office?
In Kazaure’s words, the President was hoping to liquidate all the national and international debt, implement the budget, add to the country’s reserve and import dollars instead of paying subsidy and also save the remaining for the next government. Are these goals still important to the President? Why, then, is this not considered a national priority?
Importantly, are the National Assembly and the anti-graft agencies going to continue watching from afar until they get a ‘special invitation’ to the party?