Following several requests by taxpayers seeking clarifications on the current administration of Stamp Duties Act in the country, the Federal Inland Revenue Service (FIRS) has published detailed information to guide taxpayers and the general public on rates payable as stamp duty.
The clarification guide, which is contained in a Public Notice signed by Executive Chairman, FIRS, Mr. Muhammad Nami, published on its website, stated that Stamp Duty is chargeable on both physical and electronic instruments in two ways i.e. Ad-valorem, where duty payable is a percentage of the consideration on an instrument; or Flat Rate, where a fixed sum is chargeable irrespective of the consideration on dutiable instrument or document.
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The notice described stamp duty as a tax payable in respect of dutiable instrument as provided under the Stamp Duties Act, CAP S8, LFN 2004 (as amended). “Such instruments include Agreements, Contracts, Receipts, Memorandum of Understanding (MOU), Promissory notes, Insurance policies and others stipulated in the Schedule to the Stamp Duties Act” .
The guide further stated more than 50 types of chargeable transactions require stamp duty.
It also specified the rates chargeable on each, adding that some of the chargeable transactions are bank deposit or transfer, loan agreement, Memorandum of Understanding (MoU) related to land, sales agreement, will, tenancy/lease agreement and all receipts.
The service has also clarified that the recently launched FIRS Adhesive Stamp “is not the same as postage stamp administered by NIPOST for the purposes of delivery of items and documents, and is therefore not a substitute for the FIRS adhesive stamp, which is produced for the sole purpose of stamp duty payment.”
It stated, “It is the responsibility of Ministries, Departments and Agencies (MDAs), Money Deposit Banks (MDBs), Companies, Landlords, Executors, etc. to ensure that service providers, contractors, tenants etc. pay stamp duties due on agreements, receipts and other dutiable instruments.
“Failure to deduct or remit stamp duties into the Federal or State Stamp Duties Account attracts relevant penalties and interest as stipulated in the Stamp Duties Act, Cap S8, LFN 2004 (as amended)”, FIRS added.
