June 30, 2020 witnessed the formal inauguration of the Inter-Ministerial Committee on Audit and Recovery of Back Years Stamp Duties as well as the launch of the Federal Inland Revenue Service’s Adhesive Stamp.
The theme of the event was: ‘Stamp Duties Act: Repositioning Nigeria Towards Greater Revenue Generation’.
Before that event, a huge smog of haze had somewhat, blighted a clear understanding of the meaning and the essence or significance of the campaign by the FIRS for a reinvigorated regime of stamp duty in the country.
Abubakar Malami, Attorney General and Minister of Justice, explicitly highlighted the legality of the 2019 Finance Act, its provisions on stamp duty and, the legal status of the FIRS as the sole statutory agency charged with the supervision and collection of all revenues derivable from stamp duty.
“It follows therefore that on the strength of the provision of the FIRS Act, it is conferred with powers to administer (including perform audit exercise) and collect all taxes and levies due to the federal government.”
Minister of Finance, Zainab Shamsuna Ahmed, also buttressed the legal status of the FIRS in the administration of stamp duties as “A tax type that serves to open untapped revenue sources for increased revenue collection.”
In a summary of all the enlightenment he had done in media interviews and other public fora on the FIRS and the reinvigorated regime of Stamp Duty administration, Mr Muhammad Nami, the Executive Chairman of FIRS, used the occasion to further elucidate on the philosophy, logic, essence and benefits of the commitment of his agency on stamp duty as the latest thrust in delivering on its mandate of gingering up the nation’s revenue profile through robust tax administration and collection mechanisms.
Just what is stamp duty?
In a layman’s language, it is the token of levy or tax paid for certain commercial services, exchange or transactions between persons, groups or corporate entities. In spite of similarities on the surface, stamp duty is, however, fundamentally different from postal stamps or signage which universally is the responsibility of postal agencies.
Therefore, the controversy between the postal service agency and the FIRS should never have arisen in the first place.
The FIRS Executive Chairman defined stamp duty as, “Essentially a duty chargeable on instruments physically or electronically.”
The Stamp Duty Act defines “duty”, to mean, “any stamp duty for the time being chargeable under any other Act and also includes any fee chargeable hereunder.
“Stamp”, according to the Act, is “ an impressed pattern or mark by means of an engraved or inked block die as an adhesive stamp or an electronic stamp or electronic acknowledgement for denoting duty fee”
Pointing out that Stamp Duty in Nigeria dated back to 1939, Mr Nami said the 2019 Finance Act was merely the latest in the series of amendments the Stamp Duty Act had gone through over the years.
In tune with contemporary trends, he said, the Finance Act appropriately, “recognises technology, economic realities, e-commerce and cross border transactions” in the administration of tax collection for stamp duties.
While pointing out that dutiable items under the 2019 Finance Act have been expanded to include bank deposits or transfers, Mr Nami also drew attention to the upward review from N4 to N50 in bank customers’ deposits of N10,000 and above per transaction.
Giving a window into the potentials of the new drive on Stamp Duty administration, the FIRS helmsman told the gathering that about N66 billion had been netted by his agency between January and May this year.
The figure is against the total sum of N18 billion collected for the entire year 2019! He attributed the “significant leap” to the “dynamism triggered by the Finance Act 2019, sums warehoused by the CBN in respect of prior years, deployment of technology and, stakeholder’s collaboration” among other mechanisms now in use by the FIRS.
At the of the day, the public is much more enlightened on what duty stamp is and what it is not.
We now know for instance that, it is not as such, a newly invented concept but one that goes back to the colonial days.
Stamp Duty is also a universal taxational standard found in most economies of the world.
What now seems to appear unsettling about stamp duty is the reinvigorated buoyancy given to it by the 2019 Finance Act and, the manifest diligence and single-minded commitment to its administration by the new management at the Federal Inland Revenue Service (FIRS).
People all over the world pay taxes to the public treasury on rent or, over sales of properties just as, bank transactions on certain sums are dutiable. Under the new regime of Stamp Duty in the country, citizens are being demanded to do that which is done in other countries by paying taxes.
Understandably, this cannot be a piece of good news to a people who are not used to paying taxes and what they pay in the few areas that they pay, amount to one of the lowest in the world. The strident message is: buckle up, the long holiday is over.
Aside from the additional tasks thrust on it by the 2019 Finance Act, including administration of the Stamp Duty, Mr Nami has initiated a number of innovations in tax administration.
He has as well, been talking of many lofty ideals which on the surface, are capable of taking the nation out of her present economic doldrums. He owes it to himself to go beyond rhetorics by walking his talk.
While the fact is that not a few believe that Nigerians are already overburdened with multiple taxations, that is, in spite of the palliatives or reliefs contained in the 2019 Finance Act on a number of bank charges on transactions as well as, reduction in taxes paid by new and small scale entrepreneurs.
Thus, while digging deep and wide into the Stamp Duty as, ‘a gold mine’, the people who literally, are the goose that lay the golden eggs must not be overtasked through excessive taxations. It is a “Catch 22” situation of sorts because only the living pay taxes.
Ayuba Ahmad is a Kaduna-based public commentator.
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