Stamp duty can be referred to as a tax that is levied on financial transactions and on documents. From historical point of view, it included the legal documents such as receipts, cheques, marriage licences, military commission as well as land transactions. Stamp duty is also charged when sending out documents through the post office.
Recently, the federal Government of Nigeria announced the mandatory collection of stamp duty through the central Bank of Nigeria over Bank transactions that is over N1000. This was to take care of the inadequacies cost by the low petroleum price on the world scene which is the major backbone of the nation’s economy. The Government hopes to raise substantial income to continue her several programmes.
Lots of Nigerians expressed their complete dissatisfaction and unwillingness to comply with the announcement by Central Bank of Nigeria instructing that all Deposit Money Banks in the country must place a N50 charge on every transaction of N1,000 and above. In the real sense of it, people are rejected the stamp duty collection because of lack of trust in the Government to use the proceeds significantly. Many feared that the fund will be stolen or used unjustly.
Legality Of The Stamp Duty
Interestingly, when the Federal Government made the announcement via Central Bank of Nigeria, many thought they were using a form of veto power. They are actually implementing the Stamp Duties Act 2004 and Federal Government Financial Regulations 2009. This means that they are actually backed by the law of the land.
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Facts Of Stamp Duty
- The fall in global oil prices forced Government to implement stamp duty.
- The stamp duty revenue goes to the Federal Government via Central Bank of Nigeria.
- The stamp duty only concerns current account, it does not affect salary account and savings account.
- All receipts, irrespective of whether it is Cash or Electronic transfers of N1000 and above into a Current account is eligible to be charged and will be charged N50 stamp duty.
- The N50 Stamp Duty will be charged for each transaction that is N1000 and above. Not charged per volume of the transaction.
- The N50 Stamp Duty is charged only from the receiving account. That is, it is only the account receiving the fund that will be charged the N50 stamp duty.
The Stamp Duty Charge Exemptions
Below are the receipts that are exempted from the N50 Stamp Duty charge:
- Deposits or fund transfer done by SELF into another owned account in the same bank or any other banks.
- Withdrawals done from savings account.
- Any fund transfers sent to a Savings account.
- Payment of salaries or wages
If you notice any charges not in line with the above descriptions from your account. Kindly meet with your bank’s customer service for the charge reversal. If the bank fail to reverse the charges, you may forward an email to the consumer protection department of Central Bank of Nigeria for assistance via firstname.lastname@example.org
Stamp Duty Act In Nigeria
Below are some of the stamp duty act that was put together in the year 1939.
ARRANGEMENT OF SECTIONS
1. Short title.
PART I – Provisions Applicable to Instruments Generally
Charge of Duty upon Instruments
3. Charge of duties in Schedule.
4. Stamping and collection of duties on corporate instruments.
Appointment of Commissioners
6. Commissioners of stamp duties.
7. Discontinuance and issue of dies.
8. Instruments to be separately charged with duty in certain cases.
9. Facts and circumstances affecting duty to be set forth in instrument
10. Mode of circulating ad valorem duty in certain cases.
Use of Adhesive Stamps
- Cancellation of adhesive stamps.
- Proper time for stamping instruments.
- Penalty for fraud in relation to adhesive stamps.