Stamp duty is a levy on written and electronic documents or instruments. Stamp duties are levied on instruments on either Ad-valorem or flat rate basis and the body in charge of the administration of stamp duties is either the federal Inland Revenue Service (FIRS) (duties on instruments for transactions between corporate bodies and individuals, group, or body of individuals) or the State Internal Revenue Service (duties on instruments for transactions between individuals).
Before the Finance Act of 2019, stamp duties were levied on only written documents, but the Finance Act amended Section 52 of the Stamp Duty Act (SDA) to expand the scope of the instruments or documents to include electronic instruments.
Stamp duties that relate to Banks and other financial institutions are to be charged on qualifying transactions and remitted to FIRS. Some specific dutiable instruments that relate to banks and other financial instruments on which stamp duty is paid includes:
- Electronic Money Transfer Levy – Section 48 of the Finance Act 2020 amended the SDA to include Section 89A which states that a levy referred to as electronic Money Transfer Levy be charged on ELECTRONIC receipts or transfer for money deposited in any deposit money bank or FINANCIAL INSTITUTION on ANY TYPE OF ACCOUNT. The levy is to be accounted for by the person to whom the transfer is made. EMT Levy of N50.00 is to be charged on all inter-band deposits and transfers from N10,000.00, intra-bank deposits, and transfers from N10,000.00, and all other electronic receipts issued for deposits received by a financial institution.
- Loan Agreement and credit facilities – all banks and other financial instruments are required to pay stamp duties on the following dutiable instruments which relate to loan and credit facilities granted by them:
- Guarantors form – the stamp duty is paid at a flat rate of N500.00
- Loan agreement/loan capital – stamp duty is paid at an Ad Valorem rate of 0.125% of the loan amount except for loans or overdraft that fall due within one year
- Mortgages and Bonds – the stamp duty is paid at an Ad Valorem rate of 0.375% of the bond or mortgage value
Rent agreement – where the bank is the Leese/tenant, they are required to pay stamp duties on the lease agreement at an Ad Valorem rate of 0.78% where the lease agreement is less than or equal to 7 years, 3% where the lease agreement is between 7 years and 21 years and 6% where the lease agreement is more than 21 years.
Other dutiable instruments and their rates under the SDA are:
|Dutiable Instruments||Stamp Duty Rates|
|Deeds of assignment||1.5%|
|Power of attorney||1.5%|
|Appraisement or valuation of property||1.5%|
|Affidavit, Affirmation, and Statutory Declaration||N0.45k|
|Agreement under hand||N0.15k|
|Agreement under seal||N3.00|
|Appointment of trustee||N0.50k|