Stamp Duty: Who collects the instrument tax between FIRS and NIPOST?

*Stamp duty should be collected by NIPOST, same way Nigerian Customs Service (NCS) collects customs duties ─ Minister of Communications and Digital Economy

*It is exclusive responsibility of FIRS to collect stamp duties ─Attorney-General

Isola Moses | ConsumerConnect

The last may not have been heard about the continued altercation between the Federal Inland Revenue Service (FIRS) and Nigerian Postal Service (NIPOST), which are two leading Federal Government agencies currently at war over which right it is to collect stamp duty.

It recalled that President Muhammadu Buhari January 13, 2020, had signed the Finance Bill 2019 into law, making it the Finance Act 2020 which introduced new tax regimes and revenue collection strategies.

Stamp Duty is a tax paid to the federal or state government on documents (also known as instruments).

The move, however, was said to have caused disruption in the revenue generation scheme of the Federal Government, one of which is the granting of exclusive right to the FIRS to collect stamp duty nationwide.

It is chargeable on transactions including the Power of Attorney (PoA), Deed of Assignment, Certificates of Occupancy (C of O), Sales Agreement, Lease Agreements, Memorandum of Understanding (MoU), Insurance Policies, Joint Venture Agreements (JVA), Contract Agreements, among others.

The payment of stamp duty is enabled by the Stamp Duties Act 1939 (SDA), as amended by numerous acts and various resolutions and contained in the Laws of the Federation of Nigeria.

The SDA also provides a list of documents in its schedule and the duty payable on each of them.

This is not the first time the agencies are enmeshed in conflict on the right to stamp duty collection, according to Daily Trust.

It was learnt that in 2016, the over N2trillion stamp duty revenue collection tussle started among three agencies –the Central Bank of Nigeria (CBN), NIPOST and FIRS, when the finance bill was initiated.

At the time, the CBN asked Money Deposit Banks (MDBs) through a circular to deduct N50 stamp duty on every electronic transfer with a value of N1,000 and above.

That spurred its interest in the right’s game, but FIRS had contended that it was its responsibility; NIPOST, which originally owns stamps, was not ready to jettison.

While CBN later left the stage, NIPOST and FIRS continued to lay claims to Stamp Duty collection since 2019.

On May 30, 2020, NIPOST tackled FIRS, insisting it had the exclusive right to Stamp Duty collection, and not FIRS.

NIPOST in a statement justified this saying the Finance Act 2020 contains some “contradictions”, which should be addressed by appropriate authorities.

The postal agency said the Office of the Accountant-General had also issued a circular to NIPOST on the collection of both physical and electronic stamp duty of N50, maintaining that there was no conflict between NIPOST and FIRS.

Dr. Isa Ali Ibrahim Pantami, Honourable Minister of Communications and Digital Economy, had echoed that saying it was unfair to deny NIPOST the right to collect stamp duty.

The Minister said: “To me, stamp duty should be collected by NIPOST, the same way the Nigerian Customs Service (NCS) collects customs duties. FIRS has been working on being the agency that collects stamp duty.

“It started before my appointment and I only got to know when the situation had deteriorated. I intervened by informing Mr. President that NIPOST should be the one to collect stamp duty.”

Dr. Pantami added that he had also written to Mrs. Zainab Ahmed, Honourable Minister of Finance, Budget and National Planning, opposing the move.

Report however, stated that the seemingly unending disagreement was rekindled June 30, 2020, at the inauguration of the Inter-Ministerial Committee on Audit and Recovery of Back Years Stamp Duties in Abuja.

On the occasion, it gathered that Mr. Abubakar Malami, Attorney-General and Minister for Justice, submitted that it is the exclusive responsibility of FIRS to collect stamp duties, citing the Finance Act.

The government would recover unremitted stamp duties of about N5 trillion from January 2016 to date from the relevant Ministries Departments and Agencies (MDAs), Money Deposit Banks (MDBs) and Nigerian Inter-Bank Settlement System Plc (NIBSS), amongst others, said Malami.

Muhammad Nami, Executive Chairman of FIRS, likewise announced measures to raise stamp duty collection to N1trn annually going forward.

According to Nami, “there is assurance that the collection from Stamp Duty will be second to oil revenue as it has the potential to yield up to a trillion naira revenue annually if properly harnessed.”

The agency, he stated, has already ramped up stamp duty collection from N18 billion in 2019 to N80bn in 2020 and counting based on its recent statistics.

According to the report, in igniting another brawl, Mrs. Maimuna Abubakar, Chairman of Board of NIPOST Tuesday took to Twitter to call out FIRS.

The revenue agency had ‘hijacked’ NIPOST’s duty by “selling stamps’ ‘rather than buy from them, said Mrs. Abubakar.

She stated that any other agency “printing and selling stamps is against the law of the land.

“FIRS did not only steal our stamps but also our ideas; what NIPOST had worked for since 2016, our documents, patent and sneaked everything into finance bill and tactically removed the name of NIPOST,” she said in a viral tweet that had the hashtag #justicefornipost.

“There is nowhere in FIRS Act or Stamp Duty Act where it’s so stated that FIRS can produce stamp or sell stamp #justicefornipost.”

Malam Abdullahi Ismaila Ahmad, Director of Communication and Liaison Department at FIRS, in reaction to the Chairman’s submission, Tuesday said it was it was clearly stated in the Finance Act that FIRS is to collect stamp duties, adding that FIRS didn’t just claim the process.

The Director of Communication and Liaison Department of FIRS said: “There is no controversy about these issues because it has been clearly written in the Finance Act.”

He was, however, silent on the legality of FIRS selling adhesive stamps, even though he was asked about it, an action NIPOST said was illegal.

He further stated in a counter press statement that the function was clearly contrary to the claim by NIPOST over the administration of stamp duties in Nigeria.

On claims by NIPOST that FIRS stole its ideas, the FIRS Director said, “this, to say the least, is a preposterous claim and great disservice to the government and people of Nigeria.”

“The FIRS is determined to not only ensure that all monies collected by NIPOST into its illegally operated stamp duties account are fully remitted into the Federation Account but also make sure that any kobo not accounted for in that account is legally recovered in line with the charge of President Muhammadu Buhari to the recently inaugurated Inter-ministerial committee on the recovery of stamp duties from 2016 till date,” FIRS stated.

As the brickbat continues between the two top agencies of the Federal Government, perhaps only legal interpretation of statutes will rest the agitations.

But who will go to court between the FIRS and NIPOST? Added the report.

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