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Stamp Duty And Banks



The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), recently said it would probe 22 commercial banks over stamp duty collections. The agency said the probe would involve a forensic investigation of the funds that had so far been collected as stamp duty by 22 Deposit Money Banks (DMBs) from 2000 to 2018.

According to RMAFC, the commercial banks have been deducting the sum of N50 on every deposit with a value of N1, 000 and above since January 2000 and a total sum of N33bn had been realised through the collection of stamp duties. The agency said the collection falls far below the expectation of stakeholders.

It also said that it is expected that at the end of the exercise, over N100bn will be recovered, even as it added that the commission has concluded arrangement to engage the services of reputable forensic audit firms to carry out the probe of the banks. It boasted that the probe will be comprehensive as it will cover the affixed stamp used on cheque books prior to the introduction of electronic transactions.

Section 89(2) of the Stamp Duty Act says: “Every receipt given by any person in acknowledgement of good produced or services rendered should be denoted by an adhesive postage stamp worth N50 issued by the Nigerian Postal Service.” Section 14(2) of the same Act compels a mandatory receipt to be denoted.

Government expects to raise about N2.2 trillion annually from stamp duty, another pot of gold that may become its highest single source of revenue. You can be sure that they’ll mine it. It is good and expected of citizens to pay taxes to support and own their government. Government had always been run with taxpayers’ money, until easy oil royalties derailed the tax system.

Stamp duty charge is payable on electronic transfers and cash payments into current accounts. An exception is given to payments by cheques because their stamp duty charges have already been paid. You will see a stamp duty seal on the lower left side of a cheque. So you’ll see that bank customers had always been required to pay stamp duty charges.

The RMAFC is empowered to carry out the probe, as Section 162(1) of the 1999 Constitution (as amended) vests the agency with the powers to monitor all revenue accruals into the Federation Account, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.

The agency said that if the Nigerian Postal Service was properly repositioned through appropriate legal and regulatory framework, and the introduction of appropriate technology, the agency could generate over N500 billion.

It was projected that government would realise about N2.5billion daily as it was estimated that cash lodgements into various bank accounts, cash transfers from Point of Sale (PoS), Automated Teller Machine (ATM), Mobile banking transactions might reach 52 million bank accounts based on Bank Verification Number (BVN).

Similarly, the House of Representatives recently passed a resolution setting up an ad hoc committee to investigate the non-remittance of stamp duty charges by commercial banks and other collection agents into the federation account of Nigeria. The House gave the committee the mandate to report back its findings within four weeks. This followed the unanimous adoption of a motion brought under matters of urgent public importance by Hon. Goni Lawan, who informed the House that independent efforts by both local and international civil society organisations to get details of the collections so far have remained unsuccessful.

This newspaper believes that forensic audit of the banks over stamp duty collections is a step in the right direction. It is necessary for transparency and accountability purposes as it will reveal how much the banks had remitted to the federation account as provided by the Constitution. The outcome of the probe must be made public and not swept under the carpet. This newspaper also urges that all unremitted stamp duty collections must be recovered. Even more importantly, there must be no sacred cow as any commercial bank found wanting in the exercise must be sanctioned to send out the appropriate message that infraction of the policy will not be tolerated.



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