Banks are no longer restricting the deduction of stamp duty
on deposits made into current accounts, but now apply it to deposits made into
savings accounts, investigation has shown.
The Central Bank of Nigeria had through a circular issued on
January 15, 2016 directed the Deposit Money Banks to deduct N50 stamp duty on
each deposit made into current accounts with a value of N 1000 and above in
order to boost government’ s revenue drive and in compliance with Stamp Duties
Act, 2004.The apex bank anchored its directive on a court ruling
obtained by Kasmal International Services Limited in 2014 to the effect that
the 22 banks operating in the country should remit more than N 6 tn to the
Nigerian Postal Services through the company as the stamp duty they were
supposed to have collected since the Stamp Duties Act was passed into law.
However , the CBN exempted savings accounts from the
deduction of stamp duty .
The circular stated, “ With immediate effect , all DMBs and
other financial institutions shall commence the charging of N50 per eligible
transaction in accordance with the provisions of the Stamp Duties Act and the
Federal Government’ s Financial Regulations 2009 ; that is, all receipts given
by any bank or other financial institution in acknowledgement of services
rendered in respect of electronic transfers and teller deposits from N1,000 and
above.“ For the avoidance of doubt, the following receipts are ,
however , exempted from the imposition of stamp duties : payment deposits or
transfers by self to self , whether inter or intra bank; and any form of
withdrawals / transfers from savings accounts. ”Investigation by our correspondent, however , showed that
the banks had extended the deduction of the stamp duty to savings account
transactions.
It was gathered that the Nigerian Postal Services , the
implementation agency of the Stamp Duties Act, was against the exemption of any
bank account except savings accounts held by children.It was not clear as of press time when the collection of the
duty was extended to savings accounts, but some bankers who spoke to our
correspondent on condition of anonymity said the only exemption were deposits
made by the owners of savings accounts.This means that when a third party makes a deposit into a
savings account with a value of at least N1, 000 , the sum of N50 is automatically
deducted as stamp duty, which the bank has a responsibility to transfer to the
NIPOST Stamp Duty Account domiciled with the CBN.The Lagos Division of the Appeal Court had ruled that
imposing a stamp duty on electronic transactions was illegal.Ruling on an appeal filed by Standard Chartered Bank against
Kasmal International Services Limited and 22 others, Justice Ibrahim Saulawa
and four other justices of the Court of Appeal , Lagos Judicial Division , held
that the Stamp Duties Act, 2004 did not impose a duty on the DMBs to deduct N
50 on bank deposits .
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